UNCTAD Report: Economic costs of the Israeli occupation for the Palestinian people: the post-October 2023 shocks compounding the historical cumulative cost of the occupation of the West Bank (A/80/356)

29 August 2025

Eightieth session

Item 35 of the provisional agenda*

Question of Palestine

Economic costs of the Israeli occupation for the Palestinian people: the post-October 2023 shocks compounding the historical cumulative cost of the occupation of the West Bank

Note by the Secretary-General

The Secretary-General has the honour to transmit to the General Assembly the report prepared by the secretariat of the United Nations Conference on Trade and Development.

Report prepared by the secretariat of the United Nations Conference on Trade and Development on the economic costs of the Israeli occupation for the Palestinian people: the post-October 2023 shocks compounding the historical cumulative cost of the occupation of the West Bank

Summary

The present report is submitted pursuant to General Assembly resolution 77/22, in which the Assembly requested the United Nations Conference on Trade and Development (UNCTAD) to continue to report to it on economic development in the Occupied Palestinian Territory, including East Jerusalem, and the economic costs of the Israeli occupation for the Palestinian people. The report complements previous UNCTAD reports submitted to the Assembly (A/71/174, A/73/201, A/74/272, A/75/310, A/76/309, A/77/295, A/78/303 and A/79/343).

This report draws attention to the profound cost and impact of the occupation on the West Bank – where lives, homes, infrastructure and futures face growing risks.

Since the escalation of hostilities that followed the attacks by Hamas and other Palestinian armed groups on 7 October 2023, violence throughout the Occupied Palestinian Territory has surged to levels of intensity and impact exceeding all previous violence. The use of military methods and heavy weaponry in the West Bank by Israel have led to further restrictions on access to work, and combined with unilateral deductions from Palestinian tax revenues, have led to the worst economic contraction of the Palestinian economy in its history.

In the West Bank, Israel enforces administrative and physical barriers that severely limit Palestinians’ movement, access to markets and economic resources. Area C (over 60 per cent of the West Bank) is fully controlled by Israel, where Palestinian economic activities face harsher restrictions than in Areas A and B, stifling growth and development.

In 2024, the West Bank’s gross domestic product (GDP) contracted by 17 per cent, while per capita GDP plummeted 18.8 per cent, erasing 17 years of progress^a in just 15 months. By the end of 2024, GDP regressed to 2014 levels, with per capita GDP falling to 2008 figures. Meanwhile, Gaza’s economy has collapsed, with GDP in 2024 equivalent to only 13 per cent of its 2022 level.

The present report assesses a portion of the economic costs incurred by the West Bank due to tightened restrictions imposed by Israel in the aftermath of the 2000 confrontations (Second Intifada) and post-October 2023, combined with the additional constraints in Area C.

The analysis estimates that, in the absence of these three constraints, the economy could have generated an additional $170.8 billion (constant dollars) in cumulative GDP between 2000 and 2024 – equivalent to 17 times the West Bank’s 2024 GDP. In addition, real GDP per capita in the West Bank would have been 241 per cent higher. This unrealized income accounts for a limited portion of the West Bank’s occupation-related economic costs, excluding the costs in Gaza and East Jerusalem.

The present report concludes that the cessation of all Israeli settlement activities – in compliance with international law and relevant Security Council resolutions – and the removal of all restrictions on Palestinians’ access to economic resources are critical prerequisites for achieving the Sustainable Development Goals in the Occupied Palestinian Territory.

I. Objective and scope

1. The present report adds to eight previous reports, prepared by the United Nations Conference on Trade and Development (UNCTAD) and submitted to the General Assembly, on the economic costs of the Israeli occupation for the Palestinian people. While the previous report focused on the cumulative economic impact of closures, restrictions and military operations in Gaza between 2007 and 2023, this present report focuses on the West Bank. It assesses the economic repercussions of the occupation since October 2023 and provides a partial estimate of the cumulative cost of the occupation from 2000 to 2024, particularly in relation to restrictions on Palestinian movement and access to natural resources in the occupied West Bank. Each report has been dedicated to a specific part of the Occupied Palestinian Territory, to address the distinct context, nature and impacts of hostilities and restrictions affecting each area.
2. The year 2000 was selected as the assessment’s starting date because it marked both the designated end of the five-year Oslo Accords interim period and also coincided with Israel’s imposition of stricter closure policies and constraints following the outbreak of the Second Intifada in September 2000.
3. In response to the terror attack by Hamas and other Palestinian armed groups on 7 October 2023, Israel launched large-scale military operations in Gaza. This has resulted in the displacement of almost the entire population, caused unprecedented civilian casualties, an unprecedented humanitarian crisis and devastated critical civilian infrastructure – including schools, hospitals, residential areas, agricultural land and essential utilities such as energy, water, sewage and waste management and telecommunications networks. The destruction has eradicated livelihoods, plunging the entire population into severe poverty, causing grief and exposing them to widespread hunger, malnutrition, disease outbreaks and environmental collapse.
4. The resulting economic shock is among the largest observed in recent global history. An interim rapid damage and needs assessment by the World Bank, the European Union and the United Nations estimated conflict-related damage in Gaza at $49 billion by February 2025, with housing damage accounting for $15.8 billion. Recovery needs were projected at $53.2 billion. As the military escalations continued into the second half of 2025, the full scale of the damage will remain unknown until hostilities cease and full access into Gaza for further assessments is granted.
5. This report makes a contribution in better understanding the economic impact of the Israeli restrictions, closures and measures in the aftermath of 7 October 2023. It expands the findings and methodologies of previous reports (A/76/309 and A/77/295). The estimated costs in this report are deliberately conservative and should be understood as lower-bound indicators of the total economic cost. The costs estimated in this report arise from:

(a) The cumulative economic cost of the closures and restrictions Israel imposed after the outbreak of the Second Intifada (2000–2006) was substantial. The measures severely restricted economic activity, caused significant income losses and exacerbated pre-existing structural weaknesses and vulnerabilities. Their lasting impact continues to undermine growth, hinder human capital development and result in persistently high unemployment and widespread entrenched poverty, with poor outcomes in health and education;

(b) The cumulative economic cost in terms of the estimated loss in potential GDP due to Israeli imposed restrictions on Palestinian economic activity in Area C. The estimate reflects the difference in outcomes that could have been realized if Palestinian economic activities in 30 per cent of Area C (excluding the part of Area C designated for settlements) had been subjected to the lower level of restrictions imposed by Israel in Areas A and B. The estimation accounts for the additional and more severe limitations enforced by Israel in Area C;

(c) The additional restrictions, closures and military operation imposed in the occupied West Bank after 7 October 2023, precipitated the largest economic contraction and income loss the West Bank has experienced in decades.

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V. Concluding observations

1. The escalating violence in the occupied West Bank is deeply alarming. Security operations by Israeli forces in the northern West Bank have resulted in high levels of fatalities, including women and children, significant population displacement, and destruction of homes and infrastructure, particularly in refugee camps. The demolition and seizure of Palestinian-owned structures as well as structures related to income generation, and the provision of essential services may entail numerous violations of international humanitarian law and international human rights law. Restrictions on access to land and natural resources continue to obstruct economic activity and sustainable development of Palestinians. As the backbone of the Palestinian economy – supporting 60 per cent of Palestinians – the occupied West Bank’s potential has been systematically undermined by the prolonged occupation and its associated restrictions, including access to natural resources. UNCTAD reports have documented how Israeli-imposed constraints, including movement barriers, land confiscations, and settlement expansions have forced the economy to operate far below capacity.
2. Without some of the occupation-imposed constraints, the West Bank’s economy would have been 68 per cent larger between 2000 and 2024, equivalent to a cumulative loss of $170 billion – nearly 17 times the size of its 2024 GDP. In other words, a subset of occupation constraints cost the West Bank economy over two thirds of its 2024 size.
3. I reiterate that all Israeli settlements in the occupied West Bank, including East Jerusalem, including all related infrastructure, have no legal validity and are in flagrant violation of international law and relevant United Nations resolutions. Settlement advancement impedes Palestinian access to land and their resources, threatening the contiguity and viability of a Palestinian State. I once again urge the Government of Israel to cease all settlement activity immediately, in line with its obligations under international law. In this respect, I note the recent findings by the International Court of Justice in its advisory opinion of 19 July 2024 which found that the effects of Israel’s policies and practices particularly in the West Bank and East Jerusalem, include the deprivation of the Palestinian people of the enjoyment of the natural resources of the territory and the impairment of the Palestinian people’s right to pursue its economic, social and cultural development.
4. In this context, the lifting of all restrictions on Palestinian economic activity in the occupied West Bank, Gaza and East Jerusalem is crucial to provide the Palestinian economy with the necessary foundation for development, accommodate growing demographic needs, and the realistic pursuit of the Sustainable Development Goals.
5. The Palestinian Authority continues to face a deepening fiscal crisis that threatens to further undermine Palestinian institutions and basic service delivery. Increased Israeli clearance revenue deductions and measures that introduce instability to the Palestinian financial sector should be urgently resolved.
6. It is crucial that the decline in international support for the Palestinian people, which has persisted for over a decade and a half, be reversed. Such aid has been critical in alleviating the severe socioeconomic hardships imposed by the Israeli occupation. The occupation’s immense fiscal burden severely undermines the ability of the Government of the State of Palestine to generate sufficient revenue for governance and development. To prevent a further drastic decline in socioeconomic and humanitarian conditions, substantial foreign aid remains indispensable. However, humanitarian and economic assistance, while essential for immediate needs, cannot be a substitute for the Palestinian people’s inherent rights to development, self-determination and sovereign statehood. The occupation must end as rapidly as possible, as noted by the International Court of Justice in its advisory opinion of 19 July 2024.
7. I remain committed to supporting Palestinians and Israelis in ending the occupation and resolving the conflict in line with international law, relevant United Nations resolutions and bilateral agreements in pursuit of the vision of two States – Israel and a fully independent, democratic, contiguous, viable and sovereign Palestinian State, of which Gaza is an integral part – living side by side in peace and security within secure and recognized borders, on the basis of the pre-1967 lines, with Jerusalem as the capital of both States.