UN says Gaza is suffering the world’s worst economic collapse ever recorded

GENEVA, September 25 - The United Nations has declared Gaza is experiencing the world's worst economic collapse ever recorded, with 9 out of 10 businesses destroyed and hundreds of thousands unemployed, according to a top UN development agency. The devastation was caused by Israel's military offensive, triggered by Hamas militants' attack in October 2023.

The territory of over two million people remained under a patchy ceasefire announced in October 2025. Pedro Manuel Moreno, acting secretary-general of the UN Conference on Trade and Development (UNCTAD), stated that the collapse of Gaza's economy represents the most severe economic crisis on record, erasing decades of development and triggering an acute economic crisis for its people.

UNCTAD reported that 92% of Gaza's economic establishments were damaged or destroyed, resulting in a daily per capita GDP of just US$0.58 (RM2.37). Prices have surged 274% compared to 2022. Israel's military operation resulted in over 73,000 deaths, according to Hamas-controlled health ministry data, which the UN considers reliable.

The conflict displaced nearly the entire population and caused extensive damage to buildings. Prior to October 2023, two-thirds of Gazans were poor; now, everyone in Gaza is multidimensionally poor, according to Mutasim Elagraa, UNCTAD's coordinator for assistance to the Palestinians. Industrial and agricultural activities have plummeted by 94%, leaving only 1.5% of arable land accessible, forcing total dependence on humanitarian food aid.

The report also highlights an economic and financial crisis in the occupied West Bank, citing reduced access to land and natural resources due to Israeli settlement expansion. The Palestinian government has accumulated significant debt from local banks, the Palestinian pension fund, and private contractors, warning of a potential banking collapse. The UN warns that the political, social, and humanitarian consequences will be immense.