The Gaza war has had a devastating impact on Palestine’s development, according to a report by the UN Development Programme (UNDP) and the UN Economic and Social Commission for Western Asia (UNESCWA). The report warns that without lifting economic restrictions, investing in development, and enabling recovery, relying on humanitarian aid alone may not be enough to restore pre-war levels of development.
The report presents three potential recovery scenarios for Palestine, considering both the immediate impact projected for 2025 and the long-term impact anticipated by 2034. ESCWA Executive Secretary Rola Dashti emphasizes the urgent need to end the suffering and bloodshed in the region and find a lasting solution that promotes peace, dignity, and sustainable development while upholding international law and justice.
The report predicts a 35.1% contraction in GDP and a potential 49.9% unemployment rate in 2024 compared to a no-war scenario. Poverty is also expected to rise to 74.3%, affecting 4.1 million people, including 2.61 million who will become impoverished due to the war.
The assessment also looks at the extent and depth of deprivation using multidimensional poverty indicators and presents three early recovery scenarios. The non-restricted scenario, which involves lifting economic restrictions and restoring withheld clearance revenues to the Palestinian Authority, estimates that $290 million in annual recovery efforts, combined with $280 million in humanitarian aid, could increase productivity by 1% annually and put Palestinian development back on track by 2034.
However, UNDP Administrator Achim Steiner stresses that this scenario can only be achieved if recovery efforts are unrestricted. He warns that even with annual humanitarian aid, the economy may not fully recover for a decade or more. As such, the report calls for a comprehensive recovery and reconstruction plan that combines humanitarian aid with strategic investments and the lifting of economic restrictions to put the Palestinian economy back on track.
The full assessment report can be found here.