Israel and Gaza, 2023–2026: The Economic Cost for Israel, Gaza, the West Bank and the Region

This chapter follows one war through several economies. Israel, a high-income economy with deep financial markets, has paid mainly through higher spending, borrowing and a smaller workforce. Gaza, already poor and closed, has lost most of its buildings and productive capital. The West Bank lost most of its jobs in Israel and much of its government revenue. Lebanon, the Red Sea and Iran have their own chapters (see Chapters 4, 7 and 8), so they are covered only briefly here.

A note on figures. Casualty figures for Gaza come from the Gaza Ministry of Health, which is part of the Hamas-run government and does not separate civilians from combatants. The UN and many independent experts regard its figures as the most reliable estimate available.^[1] Israel disputes Palestinian figures, including the hunger death toll.^[12] Where statistical agencies disagree, this chapter gives both numbers.

1. Background: how the war began

The conflict has deep roots. In 1947 the UN proposed splitting British-ruled Palestine into an Arab state and a Jewish state. In the 1948 war, Israel came to hold about 77% of the former Mandate territory, and more than half of the Palestinian Arab population fled or was expelled.^[13] In the 1967 war Israel occupied the West Bank, including East Jerusalem, and the Gaza Strip.^[13] The 1993 Oslo Accord led to mutual recognition between Israel and the Palestine Liberation Organization and to limited Palestinian self-government.^[13] In 2005 Israel withdrew its settlers and troops from Gaza but kept control of its borders, coast and airspace. After Hamas took control of Gaza by force in 2007, Israel imposed a blockade.^[13]

The blockade shaped Gaza’s economy. UNCTAD, the UN trade and development agency, estimates that Gaza’s economy grew by only 0.4% a year on average between 2007 and 2022.^[14] Gaza’s share of the Palestinian economy fell from about 36% before 2006 to no more than 17% in recent years.^[15]

On 7 October 2023, Hamas-led militants attacked southern Israel, and Israel responded with a military campaign in Gaza. The main events since then are set out below.^[1][16]

2. Where things stand now

As of October 2026, the Gaza ceasefire of 10 October 2025 is still formally in place, but the second phase of the plan is largely unfulfilled.

Hostages and prisoners. On 13 October 2025 all 20 living hostages were freed, and Israel released more than 1,900 Palestinians. These included 250 people serving life sentences and about 1,700 people detained in Gaza and held without charge.^[1] On 26 January 2026 Israel confirmed that the remains of the last hostage, Ran Gvili, had been returned.^[21][19]

Governance. On 17 November 2025 the UN Security Council adopted Resolution 2803, with China and Russia abstaining. It welcomed the Board of Peace and authorised a temporary International Stabilization Force (ISF) until 31 December 2027.^[20] A Palestinian technocratic committee was set up in January 2026, but it was still based in Cairo, not Gaza, in October 2026.^[26][27] In May 2026 the Board of Peace called Hamas “the principal obstacle” because it refused verified disarmament.^[26] Hamas later offered to place its weapons under the technocratic administration; Israel says it will not withdraw before full disarmament.^[27]

Security. The ISF was first planned at 20,000 soldiers plus 12,000 police.^[22] By September 2026 it was planned at about 2,500 troops, none yet in Gaza.^[28] Estimates of the share of Gaza under Israeli control vary by source and date: more than 50% (May 2026), about 60% (September 2026), and about two-thirds to 70% (October 2026).^{[26][24][27][29]} According to the Gaza Ministry of Health, about 1,450 Palestinians were killed in Israeli strikes in the first year of the ceasefire.^[29] The ministry’s cumulative toll since October 2023 passed 73,600 killed and 174,000 injured by early September 2026, and was reported at about 74,000 killed in early October.^[30][31]

Aid and reconstruction. Aid entering Gaza averaged about 227 trucks a day between the ceasefire and the end of May 2026, against a minimum of 600 a day in the plan.^[27] At the Board of Peace’s first meeting in February 2026, nine member countries pledged $7bn and the United States pledged $10bn. Some outlets reported $5bn for the member pledges.^[22] In September 2026 the Board proposed a six-month, $2.45bn plan of 66 projects. At that point reconstruction had not begun and most people lived in tents or ruins.^[24] No reconstruction money is known to have arrived.^[29]

Israel. Output grew 14.9% (annualised) in the second quarter of 2026; in August inflation was 1.5% and unemployment 2.8%.^[32][33][34] A general election is scheduled for 27 October 2026, and Moody’s is expected to review Israel’s rating after it.^[25]

West Bank. Israel has fully suspended transfers of “clearance revenues” to the Palestinian Authority (PA) since May 2025. The PA has been paying only part of public salaries.^[11]

3. The economy before the war

Israel. Before October 2023 Israel was a fast-growing, high-income economy. Real GDP grew by 9.3% in 2021 and 6.4% in 2022.^[35] In 2022 the government ran a budget surplus of 0.6% of GDP, its first since 1987.^[36] Public debt was about 60% of GDP.^[7] Inflation averaged 4.4% in 2022, and the Bank of Israel had raised its policy rate to 4.75% by May 2023.^[37][38] Unemployment was low, at 3.4% in 2023.^[39] Israel’s credit ratings were in the A to AA range (Moody’s A1, S&P AA-, Fitch A+).^[9] Tourism had reached a record of about 4.55m visitors in 2019.^[40] More than 150,000 Palestinian workers entered Israel each day from the West Bank.^[41]

The Palestinian territories. The Palestinian economy was small and split in two. Total GDP was about $15.6bn in 2022 (constant 2015 prices), of which Gaza produced about $2.7bn.^[4] Unemployment in 2022 was 25.5% overall: 14.0% in the West Bank and 45.3% in Gaza.^[4] The World Bank cites a different pre-war Gaza figure of 22% (as quoted from PCBS), which may use another measure; the two figures cannot be reconciled from the published reports.^[11] In mid-2023 about 64% of Gazans and 12% of West Bank residents were poor.^[42] More than 177,000 Palestinians worked in Israel and the settlements, according to the World Bank.^[11] An Israeli workers’ rights group put the number entering Israel at about 100,000.^[43] The PA depended heavily on clearance revenues: taxes, mainly VAT and import duties, that Israel collects on its behalf under the Paris Protocol.^[11]

4. The economic impact: indicator by indicator

4.1 Output and GDP

Israel. The first shock was sharp. In the fourth quarter of 2023 GDP fell at an annualised rate of 21%.^[44] Private consumption fell by 26.9% and fixed investment by about 68%, as house-building stopped.^[41] Growth for the whole of 2023 slowed to 2.1%, and to 1.0% in 2024.^[35] Because the population grew faster than output, GDP per person fell in both years, by 1.0% and 0.6%.^[45] Growth recovered to 2.9% in 2025, with GDP per person up 1.7% after two years of decline.^[35][46]

Each new front caused a dip. GDP fell during the June 2025 Iran war (−4.3% annualised in the second quarter, revised) and then jumped by 12.7% in the third quarter.^[46] It fell again during the 2026 Iran war (−1.7% in the first quarter, revised) and rebounded by 14.9% in the second.^[32] The IMF now expects growth of 3.5% in 2026, down from 4.8% before the 2026 war, and 4.4% in 2027.^[47] Even so, the IMF says GDP is about 9% below its pre-war path.^[10]

Gaza. Gaza’s GDP fell by more than 80% year on year in the last quarter of 2023^[48] and by 83% in 2024, leaving Gaza at about $362m, 87% below 2022.^[2] Gaza produced about 3% of Palestinian output in 2024 while holding about 40% of the population.^[49] GDP per person was $161 in 2024, just 4.6% of the West Bank level; in 1994 the two were close to equal.^[2]

The two main sources disagree about 2025. PCBS estimates that Gaza’s GDP fell by another 8.7% in 2025, to $331m.^[4] The World Bank estimates growth of about 30%, but stresses that this is “a rebound from a very low 2024 base, rather than a meaningful recovery”.^[11] The two use different methods and data. The updated damage assessment puts the overall fall at 84%.^[3]

West Bank. West Bank GDP fell by 22% year on year in the last quarter of 2023 and by more than 19% in 2024.^[48][50] The World Bank (16%) and UNCTAD (17%) estimated slightly smaller falls for 2024.^[49][2] GDP per person fell back to its 2008 level.^[2] In 2025 the West Bank grew by 4.4% according to PCBS, or about 3% according to the World Bank.^[4][11] Even so, it was still 13% below its 2023 level.^[4]

Palestine as a whole. Total Palestinian GDP fell by about 28% in 2024.^[50] UNCTAD says this put it among the ten worst economic crises worldwide since 1960, with income per person back to 2003 levels.^[2] GDP grew by about 4% in 2025 but was still 24% below 2023.^[4] UNCTAD reported, via the Qatar News Agency, a further 6.6% fall in the first quarter of 2026.^[51]

4.2 Inflation, interest rates and the currency

Israel. The shekel fell at first. It was 3.86 per dollar on 6 October 2023 and weakened to 4.08 on 27 October.^[52] It recovered to 3.63 by the end of 2023.^[52] Since then it has risen strongly, despite further fighting. It ended 2025 at 3.19 and reached 2.81 on 29 May 2026, its strongest level for decades. It was 3.07 on 13 October 2026.^[52] The Bank of Israel says Israel’s risk premium is back to about its pre-war level.^[53]

Inflation averaged 4.2% in 2023, 3.1% in 2024 and 3.0% in 2025.^[37] It returned inside the 1–3% target range in late 2025 and fell to 1.5% in August 2026.^[54][33] A stronger shekel lowers inflation by making imports cheaper.

The Bank of Israel moved cautiously. It cut its policy rate from 4.75% to 4.50% in January 2024 and then held it for about two years.^[54] Cuts resumed in November 2025, paused during the 2026 Iran war, and took the rate to 3.25% by September 2026.^{[54][55][53][38]}

Gaza. In Gaza, inflation came from extreme scarcity, not from money creation. Consumer prices rose by 238% in 2024. Average prices rose about 22% in 2025, after the January 2025 ceasefire brought two months of falling prices and the resumption of fighting in March brought new shortages.^[11] Prices rose 31.3% year on year in February 2026.^[11] Food prices rose 450% in the year to early 2025.^[49] The West Bank, by contrast, had inflation of about 1–2% in early 2026.^[11]

4.3 Public finances, defence spending and debt

Israel’s military spending. According to SIPRI, Israel’s military spending rose from $27.1bn (5.3% of GDP) in 2023 to $45.9bn (8.5%) in 2024.^[5] SIPRI’s first estimate called this the largest annual rise since 1967.^[56] In 2025 spending was $48.3bn, or 7.8% of GDP.^[6] For 2026 the defence budget was raised from about NIS 111bn to about NIS 140bn, plus a NIS 7bn security reserve.^[57]

Deficit and debt. Higher spending widened the budget deficit. The central government went from a surplus of 0.6% of GDP in 2022 to a deficit of about 4.1% in 2023 and 6.8% in 2024.^[36][7] War spending was about NIS 100bn in 2024.^[58] The deficit narrowed to 4.7% in 2025, below the revised ceiling of 5.2%.^[59] The 2026 budget of NIS 699bn, the largest in Israel’s history, targets a deficit of about 5%.^[60] The IMF’s wider general government measure shows a deficit of 8.1% of GDP in 2024 and 5.2% in 2025.^[47]

Public debt rose from about 60% of GDP in 2022 to 67.7% in 2024 and 68.6% in 2025, according to the Ministry of Finance.^[7][8] The IMF projects 70.1% in 2026, rising to about 74% by 2031.^[47][10] S&P noted that, before the war, it had expected debt to fall to about 55% of GDP by 2028.^[61]

Credit ratings. Moody’s cut Israel for the first time ever in February 2024, from A1 to A2, and then to Baa1 in September 2024.^[62][9] S&P cut Israel from AA- to A+ in April 2024 and to A in October 2024.^[9] Fitch cut it from A+ to A in August 2024.^[9] After the Gaza ceasefire, S&P raised its outlook to stable in November 2025 and Moody’s did the same in January 2026.^[61][63] Fitch kept a negative outlook in March 2026.^[64] No agency had raised the rating itself as of October 2026.^[9][25]

How much has the war cost Israel? Estimates differ because they measure different things. Some count only extra government spending; others add lost output.

US aid. Under a ten-year memorandum covering 2019–2028, the United States provides Israel with $3.3bn a year of military financing and $500m for missile defence.^[69] The April 2024 supplemental spending law included about $26.4bn related to Israel and the conflict. This included $4bn for missile defence and $3.5bn of military financing, as well as humanitarian aid that could be used in Gaza; totals vary with what is counted.^[70]

The Palestinian Authority’s fiscal crisis. The PA’s deficit rose from 3.7% of GDP in 2023 to 7.7% in 2025.^[11] The main cause is the loss of clearance revenues, fully suspended since May 2025.^[11] UNCTAD estimates that withheld or deducted revenues between 2019 and April 2025 totalled about $1.76bn, equal to 12.8% of 2024 GDP.^[2] The PA cites larger totals, and the World Bank says the deductions are “disputed and not fully verified”.^[11] Donors gave about $940m in 2025, covering nearly 90% of the deficit before grants. But after Israeli deductions the financing gap was about $1.3bn.^[11] The PA filled it largely by not paying bills: it owes $2.85bn to public employees and $1.82bn to suppliers, and public employees received only 50–70% of their pay in 2025.^[11] The World Bank warns that the 2026 deficit could reach $3.8bn if transfers stay halted.^[11]

4.4 Labour market

Israel. War took workers out of the economy. About 360,000 reservists were authorised for call-up in October 2023, the largest mobilisation since 1973. About 20% of the workforce was absent in October 2023, against 3% before the war.^[71] Many others were put on unpaid leave: 191,666 unemployment claims were filed between 7 October and late December 2023.^[71] Yet measured unemployment stayed low: 3.0% in 2024 and 2025, and 2.8% in August 2026.^[39][34] The IMF says call-ups and the smaller number of non-Israeli workers still hold back labour supply.^[47]

Most Palestinian workers from the West Bank were barred from Israel after 7 October.^[41] Israel raised its quota for foreign workers to 3.3% of the population in May 2024. There were about 227,000 foreign workers in early 2026, but employers still reported a shortfall of about 100,000 workers.^[43]

West Bank. The other side of this ban is lost income for Palestinians. By the first quarter of 2024 close to 500,000 Palestinian jobs had been lost: about 200,000 in Gaza, 144,000 in the West Bank and 148,000 cross-border commuters.^[42] Unemployment in the West Bank rose from 14.0% in 2022 to 33.5% in 2024, then eased to 27.7% in 2025.^[4]

Gaza. In Gaza, unemployment rose from 45.3% in 2022 to 79.7% in 2024 and 77.9% in 2025, according to PCBS.^[4] Only 9.3% of working-age people had a job in 2025.^[11] UNCTAD has reported that more than 90% of working-age Gazans are out of work, which probably reflects a wider definition.^[51]

4.5 Trade and key sectors

High technology. Israel’s high-tech sector proved resilient. Private funding for tech firms rose from $6.9bn in 2023 to $9.58bn in 2024 and more than $10.5bn in 2025.^[72] It reached $7.6bn in the first half of 2026, 52% more than a year earlier.^[73] Start-ups raised about $1.6bn even in June 2025, during the Iran war.^[74]

Tourism. Tourism was hit very hard. Israel received about 3.0m tourists in 2023, most of them before October.^[40][75] Arrivals fell by 68% to 961,000 in 2024.^[75] They recovered only partly, to about 1.3m, in 2025.^[76]

Construction and agriculture. These sectors depended most on Palestinian labour and suffered acute shortages.^[71] Fixed investment fell by 5.5% in 2024 and recovered by 8.1% in 2025.^[46]

Gaza’s productive base. UNCTAD reported in September 2026 that 92% of Gaza’s income-generating establishments were damaged or destroyed. Agricultural and industrial output was down 94%, and construction down 99%.^[51]

4.6 Poverty, food insecurity and human capital

Gaza. By 2024 the World Bank said “nearly every Gazan lives in poverty”.^[42] Gaza’s GDP per person was about $212 in 2025, or just over 50 cents a day, while prices had roughly tripled.^[51]

On 22 August 2025 the Integrated Food Security Phase Classification (IPC), the UN-backed hunger monitor, confirmed famine in Gaza Governorate. It said more than 500,000 people faced famine conditions and 1.07m were in an emergency.^[12] It projected that at least 132,000 children under five would be at risk of acute malnutrition by June 2026.^[12] Israel’s foreign ministry rejected the finding, saying there was “no famine in Gaza”.^[12] More than 1,300 people were killed while seeking food between late May and August 2025, according to UN figures.^[12] After the ceasefire, the IPC said in December 2025 that no area was in famine, although about 1.6m people (77%) still faced crisis levels of hunger or worse.^[77] In August 2026 more than 1.2m people remained acutely food insecure.^[27]

Loss of human capital is the longest-lasting cost. The updated damage assessment estimates that Gaza’s human development has been set back by 77 years. More than half of hospitals are not working and almost all schools are damaged or destroyed.^[3] About 1.9m people, nearly the whole population, have been displaced, many more than once.^[3] According to the Gaza Ministry of Health, at least 21,000 children are among the dead.^[31]

West Bank. Poverty in the West Bank rose to about 18%, and more than half of all Palestinians are now poor.^[11] OCHA recorded about 1,485 settler attacks from January to October 2025, and more than 4,200 olive trees were vandalised during the 2025 harvest, a direct hit to farm incomes.^[78] Military operations displaced at least 31,919 refugees from the Jenin, Tulkarm and Nur Shams camps, the largest West Bank displacement since 1967.^[78]

Israel. For Israel, the human cost was concentrated in the 7 October attack and the taking of 251 hostages.^[1] A lasting economic effect is the repeated absence of reservists from their jobs, which the IMF says still constrains labour supply.^[47]

4.7 Physical damage and reconstruction needs in Gaza

Assessments separate damage (destroyed assets, a stock), losses (output forgone, a flow) and needs (the cost of recovery). Each estimate has been larger than the last:

• By the end of January 2024 damage was already $18.5bn, equal to 97% of the combined 2022 GDP of the West Bank and Gaza.^[79]
• The February 2025 assessment (covering to October 2024) found about $30bn of damage, $19bn of losses and $53bn of needs. Housing made up 53% of damage.^[49]
• The April 2026 update found $35.2bn of damage, $22.7bn of losses and $71.4bn of needs over ten years, including $26.3bn in the first 18 months.^[3] It counted 371,888 housing units destroyed or damaged, and more than 60% of residents had lost their homes.^[3]

Satellite analysis by UNOSAT in October 2025 found that about 81% of all structures in Gaza had been affected, of which 123,464 were destroyed.^[80] The UN Environment Programme estimated about 61.5m tonnes of debris, some of it containing asbestos or hazardous waste.^[81] Using growth rates from before the war, UNCTAD has estimated it could take decades, or even centuries, for Gaza’s GDP to return to its 2022 level.^[14][2]

4.8 Israel and the Iran wars of 2025 and 2026

Israel’s two wars with Iran added further shocks (Chapter 8 covers Iran in detail). In the June 2025 war, business output fell 6.2% in the second quarter, but activity recovered quickly in July.^[17] Missile damage led to about 39,000 property claims worth about NIS 4.5bn ($1.32bn), against NIS 2.6bn for the whole Gaza war up to then.^[18] The 2025 deficit ceiling was raised to 5.2% of GDP.^[17]

The war that began on 28 February 2026 caused weeks of missile fire, school closures and business disruption.^[23] The Ministry of Finance put its budget cost at NIS 35bn, of which NIS 22bn was for defence.^[67] The Bank of Israel cut its 2026 growth forecast from 5.2% to 3.8% in March.^[55] Yet the shekel kept rising and output rebounded in the second quarter.^[52][32]

4.9 Regional spillovers (brief)

The war spread costs well beyond Israel and the Palestinian territories.

• Lebanon (see Chapter 4): the World Bank put the cost of the 2023–24 conflict at $14bn and recovery needs at $11bn. GDP fell 7.1% in 2024.^[82]
• Red Sea shipping and Egypt (see Chapter 7): Houthi attacks cut daily transits through Bab el-Mandeb by more than 60%.^[83] Suez Canal revenue fell from about $10.25bn in 2023 to about $4bn in 2024.^[84][85]
• Iran and oil (see Chapter 8): Brent crude rose about 4% after the 7 October attack.^[86] The 2026 Iran war had a much larger effect. The IMF cut its 2026 growth forecast for the Middle East and North Africa from 3.9% to 1.1%.^[87]

5. What went well and what went wrong

What went well

• Israel’s financial markets stabilised quickly. The shekel recovered from 4.08 per dollar in late October 2023 to 3.63 by year-end, and it later reached multi-decade highs.^[52]
• Israel’s deficit came in below the revised ceiling in 2025 (4.7% against 5.2%), which helped to stop further rating cuts.^[59]
• Inflation returned to target, allowing five rate cuts between November 2025 and September 2026.^[33][38][54]
• Israel’s tech sector kept attracting investment throughout the war.^[72][73]
• Donors covered nearly 90% of the PA’s pre-grant deficit in 2025.^[11]
• The ceasefires brought quick relief. Gaza prices fell after the January 2025 ceasefire, and by December 2025 no area of Gaza was classified as in famine.^[11][77]

What went wrong

• Gaza’s capital stock was largely destroyed: about 81% of structures affected and $35.2bn of damage.^[80][3]
• Aid flows stayed far below the agreed level after the ceasefire, about 227 trucks a day against a minimum of 600.^[27]
• Reconstruction had not begun a year after the ceasefire, and pledges are a small fraction of needs.^[24][3]
• The suspension of clearance revenues pushed the PA into arrears and partial wage payments, which cut demand across the West Bank.^[11]
• The ban on Palestinian workers cut West Bank incomes and left Israeli employers short of labour.^[11][43]
• Israel lost its strong fiscal position: debt rose by about 8 percentage points of GDP and all three agencies downgraded its rating.^[8][9]

6. The economics behind it

Opportunity cost and war finance. Every shekel spent on defence is a shekel not spent on schools, roads or lower taxes. This is the opportunity cost of war. Israel raised military spending to 8.5% of GDP in 2024.^[5] It financed this mainly by borrowing, which is why debt rose. Borrowing spreads the cost to future taxpayers. Israel could borrow because it started with low debt; the PA had to use arrears and bank loans instead.^[11] Chapter 2 covers war finance in detail.

Why did the shekel get stronger during a war? War raises risk and should weaken a currency, but in Israel this lasted only weeks.^[52] Likely forces pushing the shekel up include continuing tech investment inflows, a falling risk premium after each ceasefire, and lower energy prices.^[72][53]

Fiscal interdependence. Because Israel collects a large share of Palestinian taxes, withholding them acts like a sudden fiscal contraction in the West Bank: wages fall, demand falls, and banks become exposed to a government that cannot pay.^[11]

Human capital loss. Long-run growth depends on skills, health and knowledge. A 77-year setback in human development means lower productivity in Gaza for decades, even after buildings are rebuilt.^[3]

7. Outlook and the way forward

Israel. The IMF expects growth of 3.5% in 2026 and 4.4% in 2027.^[47] The Bank of Israel expects 4.0% and 5.5%.^[53] Debt is projected to rise to about 70% of GDP in 2026 and about 74% by 2031.^[47][10] Key questions are defence spending, labour supply and rating decisions after the October 2026 election.^[47][25]

Gaza. Several reconstruction plans exist:

• The UN–EU–World Bank assessment: about $71.4bn over ten years, $26.3bn of it in the first 18 months.^[3]
• The Arab League plan led by Egypt (March 2025): $53bn over five years, including 400,000 housing units in two stages.^[88]
• The Board of Peace plan (September 2026): $2.45bn for the first six months.^[24]

None has yet been put into action on a large scale. Israel says it will not withdraw further before Hamas fully disarms, and neither the stabilisation force nor the new Palestinian administration had entered Gaza by late September 2026.^[27][24] UNCTAD warns that returning to pre-war GDP “could take decades”.^[2]

West Bank and the PA. PCBS sets out three scenarios for Palestinian growth in 2026: a baseline of +4.1%, a recovery scenario of +15% and a pessimistic scenario of −4.2%.^[4] Much depends on whether clearance revenues are restored and whether more Palestinians can work in Israel.^[11]

Risks. Beyond a breakdown of the ceasefire, the World Bank warns of wider regional conflict, higher energy and import costs, weaker tourism and the diversion of donor money to other crises.^[11] The IMF sees Israel’s growth risks as tilted to the downside.^[47]

8. Exam-style questions

Glossary

• Base effect: a large percentage change caused by comparison with an unusually low (or high) starting value.
• Clearance revenues: taxes, mainly VAT and import duties, that Israel collects for the Palestinian Authority and transfers to it under the Paris Protocol.
• Credit rating: an agency’s assessment of how likely a borrower, such as a government, is to repay its debts.
• Damage, losses and needs: the value of destroyed physical assets; the output and income forgone; and the cost of recovery and reconstruction.
• Fiscal deficit: the amount by which government spending exceeds revenue in a year, usually shown as a share of GDP.
• Human capital: the skills, knowledge and health of a population that make it productive.
• IPC: the Integrated Food Security Phase Classification, a UN-backed system that rates hunger on a five-phase scale, where Phase 5 is famine.
• Opportunity cost: the value of the next best alternative given up when a choice is made.
• Production possibility curve (PPC): a curve showing the maximum combinations of goods an economy can produce with its resources.
• Risk premium: the extra return investors demand to hold a riskier asset.

References

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2. UNCTAD (2025). Report on UNCTAD assistance to the Palestinian people: developments in the economy of the Occupied Palestinian Territory (press release, via UNISPAL). 25 November 2025. https://www.un.org/unispal/document/unctad-report-25nov25
3. AFP, via The Defense Post (2026). “Gaza war rebuild cost” (on the updated UN–EU–World Bank Rapid Damage and Needs Assessment). 20 April 2026. https://thedefensepost.com/2026/04/20/gaza-war-rebuild-cost/
4. Palestinian Central Bureau of Statistics (2026). “Performance of the Palestinian Economy in 2025 and Economic Forecasts for 2026” (presentation). Early 2026. https://www.pcbs.gov.ps/portals/_pcbs/PressRelease/Press_En_ForecastingPCBSE2026E.pdf
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6. SIPRI (2026). “Trends in World Military Expenditure, 2025”, SIPRI Fact Sheet. April 2026. https://www.sipri.org/sites/default/files/Military%20Expenditure%202025.pdf
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9. FXEmpire (2026). “Israel – credit ratings” (rating history by agency). Accessed October 2026. https://www.fxempire.com/credit-ratings/israel
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11. World Bank (2026). “Palestinian Economic Monitor”. May 2026. https://thedocs.worldbank.org/en/doc/caf69bb9db6d729c6b35254c5815df9a-0280012026/original/Palestinian-Economic-Monitor-5-19-26web.pdf
12. Al Jazeera (2025). “Famine confirmed in northern Gaza, global hunger monitor says” (on the IPC). 22 August 2025. https://www.aljazeera.com/news/2025/8/22/famine-confirmed-in-northern-gaza-global-hunger-monitor-says
13. United Nations, UNISPAL. “History of the Question of Palestine”. United Nations, accessed October 2026. https://www.un.org/unispal/history/
14. AP, via ABC News (2024). “Report: 350 years for Gaza to rebuild if blockade remains” (on UNCTAD). October 2024. https://abcnews.go.com/International/wireStory/report-350-years-gaza-rebuild-remains-blockade-115034068
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