Impact of the Israel-Hamas War on Gaza

By Thomas Escritt
BERLIN (Reuters)

The war between Israel and Hamas has devastated the Palestinian economy, plunging nearly all of Gaza's population into poverty. Quality of life indicators, such as health and education, have been set back 70 years, according to a Tuesday report from the United Nations Development Programme (UNDP).

Chitose Noguchi from the UNDP launched a study detailing the socioeconomic impacts of the war. The economy of the Palestinian territories—comprising Gaza and the Israeli-occupied West Bank—is now 35% smaller than prior to Israel's invasion of Gaza a year ago.

With some measures indicating poverty levels nearing 100%, unemployment has surged to 80%. Noguchi emphasized, "The state of Palestine is experiencing unprecedented levels of setbacks," during a U.N. press conference, noting that in Gaza, the situation has reversed development back to 1955.

Even in the best-case scenario, with current international aid levels sustained and flowing into Gaza and the West Bank unimpeded, it would take at least a decade for economic output to revert to pre-war levels.

The conflict, initiated by Israel following Hamas's attacks on October 7, last year—resulting in about 1,200 deaths—has wrought immense destruction. Essential infrastructure, including schools and hospitals, has been razed. 42,000 Palestinians are reported dead in Gaza, according to health ministry figures.

Approximately 3.3 million Palestinians need urgent humanitarian assistance, with 2.3 million of them located in Gaza and 1.5 million being children. The cost to repair the destroyed infrastructure is estimated at $18.5 billion, nearly equating to the entire economic output of the Palestinian territories in 2022.

The war has also severely affected human capital, with 625,000 students in Gaza lacking access to education as of the end of September. 93% of school buildings have been severely damaged. Healthcare has been similarly impacted, with 986 health workers killed by the end of September, and less than half of primary healthcare centers are still partially operational.