The Israel-Hamas war in Gaza is having a
severe impact on the Palestinian economy, according to the World Bank, which
now estimates sharp economic contraction this year and next.
The conflict, sparked by Hamas’
cross-border attacks on October 7 that killed 1,200 people, according to
Israeli figures, and saw around 240 hostages taken back to Gaza, is now
dragging on into its third month.
The human toll of Israel’s fierce
response has been extreme: More than 18,400 people in Gaza have been killed,
the majority of them women and children, according to the Hamas-run health
ministry.
The UN estimates 1.9 million of Gaza’s
2.4 million people have been displaced by the war, half of them children, as
Israel’s overwhelming aerial bombardment in the days after October 7 was
subsequently accompanied by a ground invasion aimed at destroying Hamas.
Beyond the immediate human cost, the
Israel-Hamas conflict has also “severely impacted the Palestinian economy,” the
World Bank announced in a statement published Tuesday.
Gaza’s contribution to the overall
Palestinian economy, which includes the West Bank, had already shrunk from
around 36 per cent in 2005 to just 17 percent last year, according to the
Palestinian Central Bureau of Statistics.
Israel’s fierce response to the Hamas
attacks on October 7, along with the shuttering of its borders to Palestinian
workers from both Gaza and the West Bank, is likely to severely impact the
Palestinian economy, according to the Bank.
Despite Gaza’s small economic
contribution, the World Bank now expects the overall Palestinian economy to
contract by 3.7 per cent this year, down sharply from its pre-war forecast of a
3.2 percent increase.
Next year, the situation is expected to
be even worse.
Whereas the World Bank previously
anticipated growth of 3.0 per cent in 2024, it now expects an overall
contraction of 6.0 per cent – on the assumption that the severity of the
conflict decreases next year.
If the war drags on, the economic impact
could deteriorate further.
In response to the conflict, the World
Bank has announced some financial support aimed at meeting the immediate needs
of the population in Gaza.
On Tuesday, the development lender
announced an additional $20 million in funds for medical care, humanitarian
needs, and financing for food vouchers and parcels in the besieged Palestinian
territory, on top of the $15 million already delivered.
The package, some of which still
requires board approval, would provide “emergency relief for the affected
people of Gaza,” the World Bank said.
AFP
