The fighting in Gaza between Israel and Hamas that began in October last year has completely destroyed the economy and infrastructure of the Gaza Strip, the report said. The reconstruction of Gaza's infrastructure could cost up to 18 billion USD, nearly the annual GDP of the entire Palestinian territory.

All key macroeconomic indicators have collapsed. Construction volumes have fallen by 96%, agriculture by 93%, and manufacturing by 92%. The unemployment rate has reached unprecedented levels – 81.7% in the first quarter of 2024 – and is getting worse as the conflict drags on.

The conflict has also set back most human development indicators in Gaza and the Palestinian territories.

Abdallah Al Dardari, Director of the United Nations Development Program Regional Bureau for Arab States, said: “Gaza’s Human Development Index has fallen back 69 years, and the State of Palestine’s HDI has fallen back 24 years. All the development fruits of the past 24 years has been lost. So when we talk about restoring Gaza, it’s not just about reconstructing buildings. It’s also a comprehensive recovery plan to regain what was lost in this devastating conflict.”

The UN also warned of dire economic impacts to Lebanon as a spillover effect of the Gaza conflict. The UNDP said Lebanon's GDP has declined 7.2% over the past three months, and may decrease 9% by the end of this year.