Gaza economy shrinks to less than a sixth of its pre-war size, UN report says

 Gaza's economy has shrunk to less than a sixth of its size when the Israel-Hamas war began nearly a year ago, while unemployment in the West Bank has nearly tripled, a UN report said on Thursday, underscoring the challenges of reconstruction.

The report by the United Nations Conference on Trade and Development (UNCTAD) described Gaza's economy as "in ruins" more than 11 months after Israel launched a military campaign there that has reduced much of the Strip to rubble in response to the deadly Oct. 7 attacks on southern Israel by Hamas terrorists.

The UN trade body said the Palestinian Authority (PA), which exercises limited self-rule under "Israeli occupation" in the West Bank, is under "immense pressure" that is jeopardizing its ability to function.

In addition to the economic slowdown caused by the conflict, falling international aid and revenue deductions and withholdings by Israel - which UNCTAD estimated at more than $1.4 billion since 2019 - are adding to the strain, it said.

Finance Minister Bezalel Smotrich, who ordered the funds to be withheld, accuses the PA of supporting the Oct. 7 attack on Israel. The PA denies promoting violence. Israel also routinely deducts so-called "martyr payments" paid by the PA to families of terrorists and civilians killed by Israeli forces.

UNCTAD called for "immediate and substantial intervention by the international community to halt the economic freefall, address the humanitarian crisis, and lay the groundwork for lasting peace and development." It also said there was a need for a comprehensive recovery plan.

The document described "a rapid and alarming economic decline" in the West Bank, which has suffered a surge in violence since the Gaza war.

Job losses

A total of more than 300,000 jobs have been lost in the West Bank since the war began, UNCTAD said, driving up the unemployment rate there from 12.9% to 32%.

UNCTAD blamed the decline on the unrest, which the UN says has resulted in the deaths of more than 650 Palestinians since Oct. 7 as well as new Israeli trade restrictions such as checkpoints.

Israel, which does not give Palestinian death tolls, says around 40 Israelis have been killed in attacks by Palestinians outside Gaza since Oct. 7. It says its actions in the West Bank have been necessary to counter Iranian-backed terrorist groups and prevent harm to Israeli civilians.

The war was triggered when Hamas attacked Israel on Oct. 7, killing 1,200 people and taking about 250 hostages.