A year of conflict between Israel and Hamas has resulted in “catastrophic effects on the economy” in the occupied West Bank and Gaza, the IMF said Thursday, including a nearly 90 percent drop in Gaza’s GDP.
“Preliminary official estimates point to an 86% drop in GDP in the first half of 2024” in Gaza, said the International Monetary Fund’s chief communications officer, Julie Kozak.
He added that “the civilian population of Gaza faces dire socio-economic conditions, a humanitarian crisis and insufficient aid.”
In the West Bank, “the already bleak outlook has worsened further and preliminary official figures point to a 25% drop in GDP in the first half of 2024,” Kozak told reporters at a regular briefing.
Israel has been waging a war on Gaza from Hamas since Oct. 7 that has killed 1,205 people in the country, mostly civilians, according to an AFP tally based on Israeli figures that include hostages killed in captivity.
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Israel’s retaliatory attack on Gaza has killed at least 41,788 people, most of them civilians, according to figures provided by the Hamas-run territory’s health ministry. The UN has described the evidence as credible.
The Israeli economy was also affected
Israel’s economy has also been hit by the war, with three major rating agencies downgrading its debt.
After contracting 21 percent in the fourth quarter of 2023, Israel’s GDP rebounded 14 percent in the first three months of this year, official data showed.
However, growth was subdued in the second quarter at 0.7%.
Kozak also noted that “in Lebanon, the recent escalation of the conflict is exacerbating the country’s already fragile macroeconomic and social situation.”
“We are closely monitoring the situation and this is a situation of great concern and very great uncertainty,” he added.
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Hezbollah, a Hamas ally, began exchanging cross-border fire from Lebanon with Israel after the October 7 Hamas attack. But the conflict escalated after Israel announced this week that its troops had launched “territorial incursions” into areas of southern Lebanon, following days of heavy shelling of areas across the country dominated by the group.
The bombing has killed more than 1,000 people, according to Lebanon’s health ministry, and forced hundreds of thousands to flee their homes.
Hezbollah-backed Iran fired about 200 rockets in a direct missile attack on Israel on Tuesday, prompting Netanyahu to warn that Tehran would pay.
Iran said it was in retaliation for the killing of Hassan Nasrallah, the leader of Hezbollah, in a mass bomb attack in southern Beirut.
US President Joe Biden said he was discussing possible Israeli strikes on Iranian oil facilities, in comments that sent oil prices soaring on Thursday just a month before the US presidential election.
Source: AFP