Gaza Economy Collapses, Reconstruction Needs $71 Billion Over Decade
Gaza's economy has entered one of its worst crises in decades since October 2023, marked by widespread destruction of infrastructure, housing, and economic facilities. This has led to a halt in production, trade, and transport, the loss of hundreds of thousands of jobs, mass displacement, and a sharp decline in purchasing power and sustainable income sources.
A joint assessment by the World Bank, UN, and EU published in April 2026 estimates direct material damages at approximately $35.2 billion, with economic and social losses reaching $22.7 billion. The total recovery and reconstruction needs are projected at $71.4 billion over ten years, with $26.3 billion required in the first 18 months for essential services and infrastructure.
The Gross Domestic Product (GDP) has plummeted, with real GDP falling by over 84% in 2025 compared to 2023, resulting in economic contraction. Per capita GDP has dropped to about $161, the lowest globally, with individuals losing 94% of their economic capacity since 2005. Construction saw a 99% decline, followed by industry (94%), agriculture (92%), and services (82%), rendering the economy heavily reliant on aid.
The labor market has been devastated, with about three-quarters of pre-war workers losing their jobs, leading to an employment-to-population ratio of only 9.3%. Over 80% of workers cannot work due to destroyed workplaces, blocked roads, transport issues, and power outages, creating a crisis of income, consumption, and local demand.
Trade and industry suffered $8.8 billion in damages and losses. The housing sector is the most affected, with damages estimated at $18 billion and over 371,000 housing units damaged or destroyed, causing mass displacement. Approximately 90% of Gaza's population lives below the poverty line, with over 75% in extreme poverty, and more than 1.9 million people require urgent food aid, with 22% facing catastrophic levels of acute food insecurity.
The primary challenge for Gaza's economy is not just rebuilding, but restoring productive capacity, reviving the private sector, creating jobs, restoring purchasing power, and integrating the economy into a sustainable development path.
