The war between Israel and Hamas has devastated the economies of both the contested Gaza Strip and the occupied West Bank, the head of the International Monetary Fund said on Sunday, adding that only a “lasting peace” would improve the outlook.
“The bleak outlook for the Palestinian economy is worsening as the conflict continues,” Managing Director Kristalina Georgieva said at the World Governments Summit in Dubai.
“Only a lasting peace and a political solution will fundamentally change it.”
“Economically, the impact of the conflict has been devastating,” Georgieva said.
In the war-ravaged coastal area, economic activity fell by 80 percent from October to December compared to the previous year, the IMF chief said.
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In the West Bank, the decline was 22 percent, she added.
The larger Palestinian territory has been hit hard by Israel's revocation of 130,000 work permits, the proliferation of checkpoints that significantly hindered transportation, the loss of tourism, isolation from the Gaza Strip, and Israel's withholding of tax revenues from the Palestinian Authority.
The Gaza Strip has been under intense Israeli attacks for over four months in retaliation for the Hamas attack on southern Israel on October 7th.
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Hamas's unprecedented attack resulted in the deaths of about 1,160 people, mostly civilians, according to an AFP tally based on official Israeli figures.
Israel vowed to destroy the militant group and launched airstrikes and a ground offensive that killed at least 28,176 people, mostly women and children, in Hamas-controlled territory, according to the health ministry.
Georgieva spoke at the opening of the World Government Summit, an annual meeting of senior business and political leaders in the United Arab Emirates that runs until Wednesday.
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Beyond the Palestinian territories, the Israel-Hamas war has also hit the tourism sectors of neighboring countries such as Egypt and Lebanon, she said.
Meanwhile, attacks on commercial shipping by Yemen's Houthi rebels, who the group says stand in solidarity with Palestinians in Gaza, are leading to “rising freight costs and a decline in Red Sea transit volumes, which our PortWatch has recorded by nearly 50% this year.” percent has decreased”. data,” Georgieva said in her speech.
For the Middle East and North Africa region as a whole, GDP growth is expected to improve compared to last year, but is likely to remain below previous IMF forecasts, partly due to the Israel-Hamas war, the fund reported in its latest forecast last month.
The IMF now expects the region's economy to grow 2.9 percent this year, down half a percentage point from its October forecast.
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