Gaza’s economy, society and basic infrastructure have been almost entirely wiped out. With 90 per cent of people displaced, food systems destroyed and schools and hospitals in ruins, reconstruction is becoming harder by the day.

Two years and more into the Israeli genocide on Gaza, which began in October 2023, the Gaza Strip confronts an economic and social reality beyond description. It is a complete breakdown of life and everything related to it – the economy, education, health, agriculture, land, society, and humanity itself.

It is an unprecedented scenario – the United Nations calls it the “deepest economic crisis reported in the Palestinian territories since the start of the documentation”, and UNCTAD has put Gaza on the list of the 10 worst economic disasters in the world since 1960. The situation is very grim: UNCTAD estimates Gaza has lost the equivalent of 70 years of development in just two years, which is a situation not even faced by countries that have gone through long civil wars.

The crisis is mainly about total economic destruction. From 2022, Gaza’s gross domestic product has dropped by 87 per cent. This is not just a downturn of the economy; it is a complete breakdown that has reduced the economy to only 13 per cent of its former capacity. For the year 2024 alone, GDP plummeted by 83 per cent, and Gaza’s share of the Palestinian economy, where it constitutes 40 per cent of the population, fell to just 3 per cent.

The per capita GDP is now $161 a year –  $0.44 a day – the lowest in the world, and very far from the extreme poverty line.

The societal impact of this catastrophe is huge. The whole population is in multidimensional poverty which is characterised by the loss of fundamental human rights and not just by financial difficulties: housing, food, education, healthcare, work, and psychological security.

When a whole society experiences the absence of these basic conditions all at once, the problem is no longer that of restoration of the site but that of whether or not the human race can be brought back to life within a generation.

Inflation has risen in every sector. Prices of commodities jumped up by 300 per cent, while prices of food went up by 450 per cent, making it almost impossible to live without the help of charities. Inflation is driven not by local economic activity but by the almost total halt in production and a drastic collapse in imports.

The daily number of trucks that were allowed into Gaza dropped to 166 from the 500 that were there before the conflict. An economy that depends heavily on imports will have hunger as its market king. When daily life is organised around scarcity, the situation is desperate.

Gaza has been physically wrecked in terms of its buildings and constructions. The reports of UNOSAT and IRDNA say that a total of 192,812 buildings were either completely or partially destroyed representing 78 per cent of all buildings, among those were 293,000 housing units. This has led to one of the biggest internal displacement crises in the world with a total of 1.9 million people displaced – 90 per cent of the population. They are living in makeshift tents that are not suitable for either winter or rain. They cannot hold against the elements either, just in November 2025, storms destroyed more than 13,000 tents, leaving families exposed.

Losing a house is not just a material loss, it is the loss of memory, relationships, and the place where one belongs, thus reshaping Gaza’s collective identity.

The economic drama is nothing but execution on the ground in the industrial and commercial sectors. The industrial and commercial sectors lost 96 per cent of their establishments, thus stopping production and costing 201,000 jobs. That’s not a short-term crisis of unemployment, but a large-scale deprivation of people’s rights to work, dignity, and ability to feed their families. An unemployment rate of over 80 per cent means that the community’s human and economic lives will gradually disintegrate, leading to fierce psychological disturbances, domestic violence, migration, and starvation.

The agricultural sector, which over the centuries has been the strongest pillar of Gaza’s economy, has also suffered and is still suffering the very heavy losses. The wars and bloodshed have practically wiped out the city’s food security, as 86 per cent of the farmland and 89 per cent of the fruit trees are gone. The Food and Agriculture Organization of the United Nations (FAO) says that only about 5 per cent of the land is suitable for farming and this will not change for quite some time. It won’t just be the losses of the crop and the trees that will be felt economically in the markets, but also the disruptions of the agricultural tradition farmers have passed down from one generation to the next.

The health and education sectors have faced an enormous challenge. Almost all hospitals have been destroyed, and the majority of health centres are unable to offer basic services. That has led to the fatalities of hundreds of patients who could have been saved in normal times and to thousands of children being deprived of essential vaccinations and care.

The educational system has also been hit very hard, as 91.8 per cent of the schools have been demolished. A whole generation has now missed two years of schooling, which will result in long-term human capital loss and the community’s capability to recover being diminished.

The only thing that can restore a broken society is education, but its devastation puts the future of an entire generation at stake.

Famine has become one of the worst humanitarian catastrophes. The IPC and UNICEF report that more than half a million people are in famine-like conditions. The situation in Gaza is not a natural event; it is the result of an absolute economic breakdown, food shortages, interruption of supplies, and agriculture that has been ruined, thus making Gaza one of the worst famine-affected places in the world in 2025.

The psychological and social effects are as bad as the physical ones. Surveys conducted by international bodies show 70 per cent of children go through sleeping problems, nightmares, and inability to pay attention. Economically, the situation has led to violence in homes. In a community where people continuously lose, are displaced, and their properties destroyed, social bonding is indeed a very hard task. The whole population has gone through psychological exhaustion which will be the major factor in the cognitive and emotional development of the coming generations.

Moreover, there are the structural problems that make recovery even harder. UNCTAD gives a pretty shocking estimate that the removal of rubble alone will take 22 years, and subsequently, it will take 10 more years to clear the landmines and shelling areas. These estimates indicate that unless there are sustained and substantial international efforts, Gaza would be unfit for human habitation and normal life with no economic activities. The people of Gaza are heavily dependent on external aid, and the recovery of this aid-dependent economy might slow down unless it is coupled with institutional backing and the complete lifting of the blockade.

The level of destruction that has been witnessed can be attributed to the usual method of fighting but it is also the adjunct of a so-called plan to raze the economy and society of the area to the ground. The total loss of material reached $30 billion, while the cost of reconstruction is estimated at $53 billion, thus pointing to an urgent requirement for a complete revival strategy and not just repairs.

Two years of warfare have led to the total erosion of Gaza’s economy. What is left behind is a community that is making utmost efforts to exist among the ruins and bearing injuries that will take many generations to heal. The numbers from the economic, social and human areas are all linked together; each figure corresponds to a family that lost their house, a man who became jobless, a kid who missed schooling or a patient who could not survive.

Before the restoration can take place, a no-violence situation has to be established. The blockade has to be totally lifted, crossing points opened, an unrestricted flow of humanitarian and construction aid, and a long-term reconstruction plan which will develop productive sectors and empower Palestinian institutions to resuscitate reform. Ignoring Gaza and leaving it to this situation will not restrict the catastrophe to its boundaries; it will impact the region’s tranquility.

Gaza stands today on the edge of the abyss, but the world can prevent its fall. However, time is running out, and any further delay will make reconstruction not only extremely difficult but almost impossible.

The views expressed in this article may or may not reflect those of Pearls and Irritations.

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