The United Nations has raised the alarm over the devastating impact of Israel’s war in Gaza, warning that the battered Palestinian territory’s economy is on the brink of total collapse and may struggle to survive without urgent global intervention.
In its latest report released on Tuesday, the UN Trade and Development Agency (UNCTAD) said rebuilding the war-torn enclave would cost more than $70bn, adding that the scale of destruction could take several decades to reverse.
UNCTAD described the situation as an “unprecedented collapse across the Palestinian economy”, stressing that the war and long-standing restrictions had shattered all essential systems supporting life in the Gaza Strip.
“The military operations have significantly undermined every pillar of survival — from food to shelter to healthcare — and plunged Gaza into a human-made abyss,” the report stated. It added that the widespread, systematic devastation had cast “significant doubt” on Gaza’s ability to re-emerge as a liveable society.
The current crisis was triggered after Hamas launched an attack in southern Israel in October 2023, killing 1,221 people. The assault sparked a two-year Israeli military response that has since devastated Gaza.
According to casualty figures from the Gaza health ministry — numbers the UN says are credible — more than 69,000 people have been killed in Israel’s retaliatory operations.
UNCTAD said the extensive destruction has unleashed “cascading crises — economic, humanitarian, environmental and social — propelling the territory from de-development to utter ruin”. Even under an optimistic scenario of double-digit growth backed by massive foreign aid, it warned that Gaza would need several decades to return to pre-October 2023 living standards.
To avert further collapse, the agency called for a “comprehensive recovery plan” involving coordinated international support, restoration of fiscal transfers, and easing of severe restrictions on movement, trade and investment.
Highlighting the depth of the crisis, the report noted that every resident of Gaza now faces “extreme, multidimensional impoverishment”. It recommended the introduction of a universal emergency basic income — a renewable, unconditional monthly cash transfer for all civilians in the territory.
Gaza’s economy, the report revealed, contracted by a staggering 87 per cent between 2023 and 2024, leaving its GDP per capita at just $161 — one of the lowest in the world.
Although conditions are less severe in the West Bank, UNCTAD said “violence, accelerated settlement expansion and restrictions on worker mobility” had also crippled economic activity there, resulting in the worst decline since it began keeping records in 1972.