Palestinian economy faces historic crisis, World Bank says
According to a World Bank examination, the continuous Israeli assault is causing the Palestinian economy to collapse at an extent never seen before. In the West Bank and Gaza Strip, the crisis has wreaked havoc on livelihoods, vital services, and economic activity.
In the first half of 2023, the West Bank encountered a 23% drop in economic production, while Gaza saw an 86% collapse. This year, the Palestinian economy is predicted to decline by 26% in real terms.
The World Bank characterized the situation as “catastrophic,” pointing to the damage of vital infrastructure, major interruptions to essential services, and widespread poverty.
Gaza has suffered a 300% increase in inflation, with food prices jumping 440% and energy costs more than tripling as a result of supply chain disruptions coupled with Israel’s well documented blockade of aid. Over 1.2 million people in Gaza are experiencing emergency or catastrophic levels of need, and 91% of the population is now at danger of severe food insecurity.
The Palestinian Authority’s (PA) financial status has also drastically worsened. Reduced economic activity and intermittent clearing revenue transfers have caused income sources to collapse. The PA’s $682 million funding shortfall by the end of 2023 is predicted to rise to $1.2 billion in the next months.
Nearly 500,000 jobs have been dissolved since October 2023, devastating the labor economy. This comprises 148,000 cross-border employments in Israel, 200,000 jobs in Gaza, and 144,000 jobs in the West Bank. The humanitarian catastrophe has been made worse by the absence of income.
Prior to the crisis, poverty had been on the rise, but it has now escalated to alarming proportions, World Bank says. In addition to 12% in the West Bank, 64% of Gazans were living in poverty as of the middle of 2023. Palestinians’ total poverty rate increased from 29.1% in 2017 to 32.8%. In 2023, Gaza’s per capita income fell by 28% to its lowest level ever.
The economic forecast for the future remains bleak. The magnitude of the humanitarian and economic harm Israel’s aggressive warfare is causing is further demonstrated by projections that the Palestinian economy would decline by an extra 6.5% to 9.6% in 2024.
