Gaza’s economy has suffered what a UN report describes as the world’s “most severe crisis on record,” with estimated recovery and reconstruction requirements reaching $71.5 billion by early 2026.
The assessment by the UN Conference on Trade and Development (UNCTAD) is based on the scale of the decline in real GDP per capita and the length of time the economy is expected to require for recovery.
Gaza’s annual real GDP per capita fell to just $212 in 2025 — equivalent to about $0.58 a day — representing only 17% of its already low 2022 level.
The report attributed the economic collapse to the extensive destruction caused by Israeli military operations since October 2023. It estimated that 92% of Gaza’s economic establishments had been damaged or destroyed, “bringing productive activity to a near-total halt across all sectors.”
Agriculture and industry were particularly badly affected, with output in both sectors falling 94% from 2022 levels. Construction activity recorded an even steeper decline of 99%.
Employment has also collapsed. UNCTAD estimated that only 123,300 Gazans were employed in 2025, leaving more than 90% of the working-age population without employment.
At the same time, the cost of living has risen dramatically. Prices remained 274% above their 2022 levels during 2025, with food costs “spiraling.” The report cited potatoes as an example, saying their price had risen to more than 20 times the pre-conflict level.
UNCTAD estimated physical infrastructure damage at $35.2 billion, more than two and a half times the pre-conflict real GDP of Gaza and the West Bank combined. Economic and social losses were separately assessed at $22.7 billion.
By early 2026, overall recovery and reconstruction requirements had reached $71.5 billion and “will continue to increase until a sustainable ceasefire is achieved,” the agency warned.
Gaza’s contribution to the broader Palestinian economy had fallen to below 4% by 2025. Its GDP per capita was equivalent to only 5% of that in the occupied West Bank — a stark reversal from the near parity between the two economies around three decades ago.