Riyadh: Gaza in Crisis
The ongoing Israel-Hamas conflict has plunged nearly every Gazan into poverty, with devastating consequences for the Palestinian economy, reports the World Bank.
Economic Fallout Spreads
Unemployment and underemployment, along with inflation, have led to a rapid decline in purchasing power in both Gaza and the West Bank. Since October 2023, nearly half a million jobs have been lost, and per capita GDP declined by 12 percent in 2023.
Gaza Under Siege
Israel’s bombardment of Gaza following a Hamas attack has further worsened the situation, with the Palestinian Authority facing a financing gap of $1.2 billion and the risk of fiscal collapse.
Economic Reversal
Initially forecasted to grow by 3 percent in 2023, the Palestinian economy is now expected to contract by 6.5 to 9.4 percent in 2024 due to the conflict.
Famine and Hunger
The northern governorates of Gaza are facing a full-blown famine, with one in four Gazans experiencing catastrophic hunger. Most children are at risk of stunting due to food insecurity.
Uncertain Outlook
The economic outlook for the Palestinian territories in 2024 remains highly uncertain, depending on the severity and duration of the conflict, changes in Israeli policies, and the outcome of the clearance revenue dispute.
Financial Sector Stability
The banking sector in the territories is well regulated and resilient, but economic difficulties pose risks. Stability is crucial to ensure the financial sector can weather economic challenges.