UN: Palestinian economy remains deep in crisis
UNCTAD estimates Gaza’s reconstruction at $71.5 billion and also flags mounting economic pressure in the West Bank.
The Palestinian economy remains severely disrupted, according to UN trade and development body UNCTAD. Rebuilding Gaza is estimated to cost $71.5 billion, while financial institutions and businesses in the territory face further pressure.
UNCTAD presented a new report on the economy of the occupied Palestinian territories on Thursday. It describes the economic situation in Gaza as an exceptionally severe crisis. The organisation also warns of mounting restrictions on economic activity in the West Bank and pressure on Palestinian public finances and banks.
Palestinian gross domestic product grew by 4.3 per cent in 2025 compared with the previous year. That growth, however, followed a sharp contraction and therefore started from a very low level. Total output was still 20 per cent below its 2022 level, according to UNCTAD. In Gaza, gross domestic product rose by 34.2 per cent after contracting by 83 per cent in 2024. This was primarily a statistical recovery from an exceptionally low base.
The consequences are greatest in Gaza. According to UNCTAD, 92 per cent of businesses and economic institutions have been damaged or destroyed since October 2023. Income per head there was $212 in 2025, equivalent to roughly 58 US cents a day in economic output. Unemployment rose to 78 per cent; more than 90 per cent of the labour force had no job, according to the report.
The financial sector faces a second problem. Palestinian banks’ exposure to the public sector has risen to $5.3 billion, or 42 per cent of all bank lending, according to UNCTAD. Restrictions on exchanging banknotes and on international correspondent banking relationships could make it harder to finance imports, including fuel, medicines and food, the organisation says.
For Gaza, UNCTAD estimates total recovery and reconstruction needs at $71.5 billion. A joint assessment by the World Bank, the European Union and the United Nations estimated physical damage at $35.2 billion in early 2026 and economic and social losses at $22.7 billion. The figures are estimates of damage and needs, not donor pledges.
In the West Bank, UNCTAD describes restrictions on access to land and natural resources, alongside a deterioration in public finances. The organisation also points to risks to trade if banks do not retain stable access to international payments. How quickly recovery is possible therefore depends not only on money, but also on security, freedom of movement, access to building materials and administrative arrangements. In this report, UNCTAD makes no prediction about a specific start date for reconstruction.
One story, several perspectives
What is established
- UNCTAD published a report on the Palestinian economy on 24 September 2026.
- The reconstruction needs for Gaza are estimated at $71.5 billion.
- The Palestinian economy and financial sector are under severe pressure, according to the report.
- The estimate is not a pledged amount and does not say when reconstruction can begin.
Left
Arguments The emphasis is on international responsibility and removing restrictions that hamper trade, movement and reconstruction. Funding for recovery should be made available as quickly as possible, without conditions that collectively affect the civilian population.
Values International law, equal rights, protection of civilians and public responsibility.
Consequences Conditional or slow financing could prolong the economic decline and further delay the restoration of basic services.
Centre
Arguments Reconstruction requires a controlled, phased fund with independent oversight, reliable institutions and clear arrangements for security, access and payments. Humanitarian aid and economic recovery must proceed alongside each other.
Values Feasibility, transparency, institutional reliability and protection of public funds.
Consequences A careful mechanism could limit waste and abuse, but would take more time before major investments become visible.
Right
Arguments Donors should prevent money from indirectly funding armed groups or ineffective governing structures. Recovery support should be tied to security, oversight, reforms and room for private businesses to rebuild the economy.
Values Security, conditions on public spending, property rights and financial responsibility.
Consequences Strict conditions could reduce the risk of abuse, but critics say they could also delay essential aid and reconstruction.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
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The key figures and the $71.5 billion estimate appear in the new UNCTAD report. The World Bank confirms the scale of the reconstruction task; uncertainty over financing and implementation is explicitly presented as uncertainty.
- confirmed UNCTAD estimates Gaza’s recovery and reconstruction needs at $71.5 billion. — This figure appears in UNCTAD’s press release of 24 September 2026. source
- confirmed Palestinian GDP grew by 4.3 per cent in 2025 but remained 20 per cent below its 2022 level. — UNCTAD gives both figures in the report. source
- confirmed Ninety-two per cent of economic businesses and institutions in Gaza have been damaged or destroyed. — This percentage is reported by UNCTAD. source
- confirmed Unemployment in Gaza reached 78 per cent and more than 90 per cent of the labour force had no job. — Both figures appear in UNCTAD’s press release; the World Bank reports the same order of magnitude. source
- confirmed Palestinian banks’ exposure to the public sector amounts to $5.3 billion, or 42 per cent of all bank lending. — This ratio is cited by UNCTAD. source
- confirmed Physical damage in Gaza was estimated at $35.2 billion in early 2026 and economic and social losses at $22.7 billion. — UNCTAD summarises the joint assessment by the World Bank, EU and UN in these terms. source
Editor's note
The figures come mainly from the new UNCTAD report and are broadly supported by the World Bank. The amounts are estimates; there is no established financing plan, and the precise feasibility of recovery remains dependent on political and security conditions.Sources
- UNCTAD: Gaza reconstruction needs reach $71.5 billion as Palestinian economy and public finances face severe strain — UN Trade and Development (UNCTAD)
- Palestinian Economic Monitor — World Bank
- Gaza economy has entered world's 'most severe crisis on record': UN report — Anadolu Agency
More on this in Dutch media
- NOS — „gaza palestijnse economie”
- Het Parool — „gaza palestijnse economie”
- de Volkskrant — „gaza palestijnse economie”