Since the early 1990s, Israel, the occupying Power, has imposed restrictions on the movement of goods and people in and out of Gaza. The restrictions have been greatly intensified since the 2007 takeover by Hamas of the Gaza Strip. For 17 years, 2.3 million Palestinian people have been confined to a small, 365 km2 enclave with one of the highest population densities in the world.
Entry of goods has been reduced to basic needs and humanitarian relief. In addition, Gaza has endured numerous extensive military operations in just over a decade and a half: in 2008–2009, 2012, 2014, 2021, 2022 and May 2023 and since October 2023. The restrictions, closures and recurrent military operations have resulted in the utter destruction of Gaza’s infrastructure and productive base. The hollowing out of the economy has cultivated a profound dependency on external aid. The war that followed the attacks by Hamas and other Palestinian armed groups on 7 October 2023 devastated the remnants of Gaza’s economy and infrastructure. The intense military operations in Gaza resulted in an unprecedented humanitarian, environmental and social catastrophe and propelled Gaza from de-development to utter ruin. The far-reaching repercussions will linger for years to come, and it may take decades to return Gaza to the status quo ante.
The income loss in Gaza caused by 16 years of closures and severe economic and movement restrictions and repeated military operations is staggering. According to thorough estimations described in the present report, in the absence of those constraints, by the end of 2023 it is estimated that Gaza’s gross domestic product (GDP) would have been, on average, 77.6 per cent higher than its actual level. This implies a conservatively estimated cumulative loss of $35.8 billion (in constant 2015 dollars) of unrealized GDP potential during the period 2007–2023 – equivalent to 17 times the GDP of Gaza in 2023.
The damage caused by the war between 7 October 2023 and 20 May 2024 reduced GDP per capita in Gaza by over one half, while other factors redoubled the income loss. Furthermore, physical damage to Gaza’s infrastructure caused during the period from 7 October 2023 until the end of January 2024 was estimated at $18.5 billion – equivalent to seven times Gaza’s GDP in 2022.
Once a ceasefire is reached, a return to the 2007–2022 growth trend would imply that it would take Gaza 350 years just to restore GDP to its level in 2022.
