UN reports Palestinian economic collapse among world's worst since 1960

The economy of the Occupied Palestinian Territory is undergoing its most severe contraction ever recorded, according to a new report from the United Nations Conference on Trade and Development (UNCTAD) released on November 25, 2025 . The analysis found that two years of military operations and long-standing restrictions have triggered an unprecedented collapse, wiping out decades of socioeconomic progress and placing the crisis among the ten worst globally since 1960 .

Historic Economic Collapse

The scale of the downturn is historic, with the overall Palestinian GDP falling back to its 2010 level. In a stark indicator of reversed development, GDP per capita has regressed to where it was in 2003, effectively erasing 22 years of economic progress in less than two years . The situation in Gaza is particularly catastrophic, with its GDP contracting by 83% in 2024 alone and cumulatively by 87% over two years, falling to just $362 million. Gaza's GDP per capita has plummeted to $161, a figure among the lowest in the world .

Deepening Humanitarian and Fiscal Crisis

This economic freefall has plunged Gaza's entire population of 2.3 million into multidimensional poverty, while the West Bank is simultaneously experiencing its most severe economic downturn on record, with a 17% contraction in GDP . The Palestinian government's ability to respond is crippled by a severe fiscal crisis. Plummeting revenues and the withholding of fiscal transfers by Israel, totaling an estimated $1.76 billion between 2019 and April 2025, have sharply limited its capacity to maintain essential services .

Decades-Long Recovery and Reconstruction Needs

UNCTAD warns that recovery will be a long-term endeavor, with reconstruction needs in Gaza estimated to exceed $70 billion . Even with substantial international aid and a durable ceasefire, it could take decades for the economy to return to pre-2023 levels . The report calls for urgent, coordinated international action to halt the economic freefall, restore fiscal transfers, ease restrictions, and implement a comprehensive recovery plan for the Occupied Palestinian Territory.