UNDP Report: By the end of 2024, the Palestinian economy could contract by 35%

According to the UNDP, if the war continues, economic output in the occupied Palestinian territories could shrink by one-third in 2024 compared to pre-war projections.

The ongoing conflict between Israel and Gaza has not only taken a devastating human toll but also severely crippled the Palestinian economy, according to a recent report by the United Nations Development Programme (UNDP). The international organization has warned that the economic repercussions of this war could be catastrophic, potentially reversing years of development efforts and plunging a significant portion of the Palestinian population into poverty.

Economic Decline and Shattered Projections

According to the UNDP, if the war continues, economic output in the occupied Palestinian territories could shrink by one-third in 2024 compared to pre-war projections. This grim forecast highlights the severe economic consequences of the ongoing violence, which has disrupted trade, production, and investment in the region.

“If the current situation persists, we estimate that by the end of 2024, the Palestinian economy could contract by 35 per cent compared to the pre-conflict forecast,” said Issa Nasser, the Secretary-General’s Humanitarian and Resident Coordinator for the occupied Palestinian territory.

The Impact on Poverty Levels

The UNDP report also warns of a potential surge in poverty levels across Palestine if the war extends beyond nine months. According to their estimates, poverty could rise to more than 60 per cent, with an additional 1.86 million people falling into poverty due to the crisis.

The report highlights that the Gaza Strip, which has borne the brunt of the conflict, has seen its “human development” measures set back by more than 20 years due to the war. This setback encompasses various aspects of human development, including access to healthcare, education, housing, and essential services, all of which have been severely disrupted by the ongoing violence.

Ruining the Economy: A Multifaceted Crisis

Israel’s attacks on Palestine have resulted in significant damage to infrastructure in Gaza, including roads, bridges, factories, and power facilities. This destruction has disrupted supply chains, hindered production, and made it challenging for businesses to operate, leading to job losses and reduced economic activity. The war has also disrupted trade and movement within and across the occupied Palestinian territories. Border closures, restrictions on imports and exports, and limitations on the movement of people and goods have severely hampered economic activity, limiting access to markets and hindering the flow of essential goods and services.

The ongoing violence and instability have deterred both domestic and foreign investment in the Palestinian territories, as investors seek safer and more stable environments for their capital. Additionally, the conflict has had a devastating impact on the tourism industry, which was a crucial source of revenue for the Palestinian economy. The war has exacerbated the humanitarian crisis in Gaza, with a significant portion of the population relying on aid for basic necessities. This dependency on aid has further strained the Palestinian economy, as resources are diverted from productive sectors to meet immediate humanitarian needs.

The Path Forward

Addressing the economic crisis in occupied Palestine will require a multifaceted approach, involving both immediate humanitarian aid and long-term development strategies. The UNDP has called for a cessation of hostilities and the resumption of peace negotiations to create an environment conducive to economic recovery and growth.

Additionally, the international community must prioritize providing financial and technical assistance to support the reconstruction of damaged infrastructure, facilitate the movement of people and goods, and promote sustainable economic development initiatives in the region.

Ultimately, the path to economic recovery in the Palestinian territories is intrinsically linked to the resolution of the broader conflict and the establishment of a just and lasting peace. Without addressing the root causes of the violence and instability, any efforts to revive the Palestinian economy will remain fragile and vulnerable to setbacks.