As the war in Gaza stretches into its seventh month, the State of Palestine faces a deepening humanitarian crisis, with the poverty rate soaring to 58.4 percent, thrusting nearly 1.74 million additional people into poverty. According to new estimates by the United Nations Development Programme (UNDP) and the Economic and Social Commission for Western Asia (ESCWA), the Gross Domestic Product (GDP) has sustained a staggering plunge by 26.9 percent—a loss of US$7.1 billion from a 2023 baseline unaffected by war.
UNDP and ESCWA released an updated assessment, titled ‘The Gaza War: Expected Socio-Economic Impacts on the State of Palestine,‘ reflecting the dire situation at the six-month mark of the conflict. This update includes projections for scenarios up to nine months, highlighting the prolonged suffering endured by Gazans and all Palestinians.
PROLONGED WAR, PROLONGED SUFFERING
UNDP Administrator, Achim Steiner, expressed grave concerns about the compounding costs of the prolonged conflict, emphasizing that the suffering in Gaza will persist long after the war ends. He highlighted the unprecedented levels of human losses, capital destruction, and the sharp rise in poverty, warning of a looming development crisis with lasting repercussions for future generations.
DIRE PROJECTIONS: ESCALATING POVERTY AND ECONOMIC LOSSES
Projections indicate that if the war extends to nine months, poverty rates could more than double, reaching 60.7 percent, with over 1.86 million additional people pushed into poverty. Furthermore, GDP could decrease by 29 percent, resulting in total losses of US$7.6 billion. The assessment also warns of a significant decline in the Human Development Index (HDI), potentially setting back human development in the State of Palestine by over two decades.
IMPACT ON HUMAN DEVELOPMENT INDEX
ESCWA Executive Secretary Rola Dashti underscored the unprecedented scale of destruction in Gaza, which, coupled with the loss of homes, livelihoods, infrastructure, and institutional capacities, may have systemic impacts for decades to come. She projected that Gaza could become fully dependent on external assistance, with no functional economy or means of production.
The updated assessment complements the Joint Interim Damage Assessment released by the World Bank and the United Nations, which revealed that direct damages inflicted on Gaza’s infrastructure amount to approximately US$18.5 billion, nearly the entire GDP of the State of Palestine in 2022.
UNDP, as the lead agency on early recovery, is collaborating with UN agencies and national partners to prepare for commencing early recovery efforts in Gaza and the West Bank without delay as conditions allow. This collaborative effort aims to address the urgent needs of the affected populations and facilitate long-term recovery and development in the region.
