Oct 25, 2023 - Economy

The Israel-Hamas war’s economic toll on Gaza

GDP per capita in <span style="color:#028B3B;">Israel</span> and the <span style="color:#FFA515;">West Bank and Gaza</span>
Note: West Bank and Gaza GDP data is unavailable for 2022 and 2023; Data: IMF; Chart: Axios Visuals

The Palestinian economy — encompassing both the occupied West Bank and Gaza — was expected to grow by 3% this year. Then the Oct. 7 terrorist attack by Hamas happened.

  • Now, Palestinian GDP is likely to shrink by 3% in 2023, with per-capita income falling by 5%, per estimates from the Palestinian Central Bureau of Statistics.

The big picture: Even before the current conflict, more than half of the people in Gaza lived in poverty, and 60% suffered from food insecurity. The combination of war and recession will only exacerbate Gaza's humanitarian crisis.

Where it stands: Per-capita income in Gaza is now just half the amount seen in the West Bank. As a result, Gaza accounts for less than 18% of Palestinian GDP, down from 34% before a strict blockade was put in place by Israel in 2007, according to the statistical bureau.

  • Gaza has been under intensifying bombardment from Israel since Oct. 7, and Israel is preparing to escalate the war with a ground invasion.

By the numbers: As of Oct. 16, more than 2,185 buildings and 8,840 housing units had been completely destroyed, per the bureau, along with the partial destruction of more than 89,000 housing units.

  • The rebuilding of destroyed properties is at this point just about the only economic activity left in Gaza. All economic activities other than those related to "losses in properties and fixed assets" have now come to a halt, they say.

The bottom line: Gaza, already desperately poor, is getting even poorer.

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