War with Israel pushed the Gaza Strip into recession as its unemployment rate heads to a record high, a United Nations report showed.
The Gazan economy shrank for two straight quarters for the first time since the ruling Islamist Hamas movement came to power in 2006. The 50-day conflict with Israel in 2014 sapped $460 million from Gaza’s gross domestic product, according to a July 6 report made public on Tuesday by the UN Conference on Trade and Development in Geneva.
GDP in Gaza contracted 15 percent in 2014 while the economy in the land-locked West Bank, which includes East Jerusalem, expanded 5 percent, according to the report citing data from the Palestinian Central Statistics Bureau, Finance Ministry and Israel Central Bureau of Statistics. The overall effect was a contraction of 0.4 percent for the combined Palestinian economy.
Unemployment in Gaza soared to 44 percent in 2014, the highest in the world, according to a World Bank analysis.
"The last military operation has effectively eliminated what was left of the middle class, sending almost all of the population into destitution and dependence on international humanitarian aid," the report said.
The damages from three military operations between 2008 and 2014 gives a sum of direct losses amounting to three years’ worth of lost GDP for the strip’s 1.8 million Palestinians, according to the report.