Poverty in Palestine expected to raise by more than third if war continues for 2nd month

CAIRO – 9 November 2023: The United Nations Development Programme (UNDP) said that if the war in Gaza continues for a second month the poverty rate in Palestine will soar by 34 percent, thrusting nearly half a million additional people into poverty.

The organization expected that the Gross Domestic Product (GDP) would plummet by 8.4 percent—a loss of US$1.7 billion.

In a rapid assessment released Thursdays, entitled ‘The Gaza War: Expected Socio-Economic Impacts on the State of Palestine’, the authors estimate that, as the war hit the one-month mark, poverty had risen by 20 percent and GDP had declined by 4.2 percent. The assessment also underscores that the International Labour Organization estimates that 390,000 jobs have already been lost.

“The unprecedented loss of life, human suffering, and destruction in the Gaza Strip is unacceptable. UNDP joins the UN Secretary-General’s calls for an immediate humanitarian ceasefire; the release of all hostages; and humanitarian access to allow life-saving aid to reach civilians at the scale needed,” said Achim Steiner. “This assessment alerts us that the impacts of this war will also have long-lasting effects and will not be confined to Gaza. On top of the humanitarian catastrophe we see unfolding, there is also a development crisis. The war is rapidly accelerating poverty in a population already vulnerable before this crisis hit.”

According to projections of the assessment, a third month of war would see poverty increase by almost 45 percent, raising the number of additional people pushed into poverty to more than 660,000, while the decrease of GDP will reach 12.2 percent with total losses of US$2.5 billion. The assessment warns of a sharp decline in the Human Development Index, UNDP’s summary measure of wellbeing, setting development in the State of Palestine back by between 11 to 16 years, and in Gaza by 16 to 19 years, depending on the intensity of the conflict.

“A ceasefire and sustained flow of humanitarian assistance would produce an immediate and tangible alleviation of suffering and reduce deprivation levels for hundreds of thousands of Palestinian families: this is an essential first step,” said ESCWA Executive Secretary Rola Dashti.

 “Economic recovery in Gaza following a ceasefire will not be immediate, considering the large-scale displacement of the population, the massive levels of destruction and uncertain access to resources, including materials and equipment owing to the siege on Gaza,” she affirmed.

With almost 1.5 million people in Gaza internally displaced since the beginning of the war and the massive destruction of houses reportedly destroyed or damaged, the assessment predicts that the economic downturn will further exacerbate the catastrophic humanitarian situation and will make recovery prospects challenging and slow.

The assessment compiles data and employs various analytical tools, including rapid satellite damage appraisals, night-time light satellite imagery and Computable General Equilibrium (CGE) economic modelling, to simulate the impacts of the war in Gaza on the entire occupied Palestinian territory at the one-month mark and for two-month and three-month scenarios.