The United Nations Conference on Trade and Development (UNCTAD) presented its most recent report on assistance to the Palestinian people, in which it warns that the economy of the Occupied Palestinian Territory is experiencing “its worst crisis on record”, after two years marked by increasing restrictions, massive destruction and a widespread collapse of productive activity.
According to the document, in 2024 Palestinian GDP fell to 70% of its 2022 level, while economic output contracted by 27% compared with the previous year. GDP per capita fell back to 2003 levels, erasing two decades of progress. The cost of living also soared: annual inflation reached 54 per cent, pushing thousands of families into food insecurity and impoverishment.
Social deterioration is equally severe. The unemployment rate reached 50% at the end of 2024, twice as high as in 2022, and the drop in the human development index is equivalent to losing a quarter of a century of progress.
A paralyzed economy and its population on the edge
Gaza concentrates the most devastating impact. In 2024, the local economy plummeted 83% and GDP per capita fell to just $161, one of the lowest levels in the world. Inflation reached an unprecedented 238% and unemployment reached 80%. Almost the entire population already lives below the poverty line.
Estimates indicate that 70% of Gaza’s structures are destroyed or damaged, while satellite indicators show a 73% drop in night light, reflecting the total collapse of productive activity. UNCTAD warns that recovery could take several decades, even under ideal conditions of international aid.
As Gaza suffers, the West Bank and East Jerusalem also face an unprecedented contraction. Increased restrictions on movement, settlement expansion, settler violence and territorial fragmentation have put a brake on almost all entrepreneurial and agricultural activity.
These pressures add to a structural fiscal crisis. More than two thirds of the revenues of the Palestinian Government depend on Israeli-controlled transfers. Between 2019 and 2025, deductions and deductions amounted to $1.76 billion, equivalent to almost half of the Palestinian Authority’s annual net income. For UNCTAD, 2024 was “the worst fiscal year” in the history of the Palestinian government.
- Urgent call: ceasefire, reconstruction and basic income in Gaza
- In the face of this unprecedented collapse, UNCTAD calls for immediate action:
- Establish a permanent ceasefire to allow reconstruction.
- Rebuilding critical infrastructure, especially in Gaza.
- Implement a universal emergency basic income for the population of Gaza, due to total impoverishment.
- Protect small and medium-sized enterprises, which are the backbone of employment in the OPT.
- Removing barriers to trade and movement is a prerequisite for any sustained recovery.
The agency warns that without a profound change in conditions on the ground, any international aid will be insufficient. The territory is caught in a cycle of dependence, destruction and economic collapse that worsens year by year.
For the international community, the diagnosis is clear: the Occupied Palestinian Territory is experiencing the greatest economic crisis in its modern history. The gains made in two decades have evaporated in just two years, and the ability of the Palestinian people to sustain their own economy is now at its most critical
