A recent U.N. study reveals that the economic repercussions of the Israel-Hamas conflict in Gaza are poised to hit neighbouring Arab economies hard. The economic cost for Lebanon, Egypt, and Jordan is projected to soar to $10 billion this year, potentially pushing more than 230,000 people into poverty, according to the United Nations Development Programme.
The conflict exacerbates existing fiscal pressures, sluggish growth, and high unemployment in the three Arab countries, deterring much-needed investment and impacting consumption and trade. Lebanon, already grappling with a deep economic crisis, faces further challenges.
The study, commissioned by the United Nations Development Programme, indicates that the economic toll on the three Arab states, in terms of loss of GDP, could reach $10.3 billion or 2.3 per cent. The situation could worsen if the conflict persists, potentially doubling the economic impact over the next six months.
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Reuters cited Abdallah Al Dardari, U.N. assistant secretary-general and UNDP’s Director of the Regional Bureau for Arab States, who underscored the severity of the situation, stating, “This is a massive impact. The crisis was a bomb in an already fragile regional situation… It soured sentiment with fear of what could happen and where things are going.”
The Israel-Hamas conflict, initiated by Israel’s campaign to dismantle the Hamas militant group controlling Gaza, has inflicted unprecedented destruction. Israeli forces besieged the enclave, leading to extensive damage and a tragic loss of life.
According to Palestinian health authorities, more than 18,000 people are confirmed killed, and many more are feared lost in the rubble. The mass displacement of almost 80 per cent of Gaza’s population within a short period surpasses the scale of the decade-old Syrian conflict, marking a dire humanitarian crisis.
“To lose 45-50 per cent of all housing in one month of fighting … We have never seen anything like this … the relationship between destruction level and time, it’s unique,” Reuters quoted Abdallah Al Dardari as saying.
Al Dardari, who led the study, compared the pace of destruction in Gaza to the Syrian conflict, noting that it took Syria five years of fighting to reach a destruction level comparable to what Gaza experienced in just one month.
Despite the ongoing conflict, Dardari’s team is already engaging with development funds and multilateral financial institutions to outline post-war reconstruction scenarios for Gaza. He emphasised that this effort has commenced, indicating proactive steps toward recovery.
(With inputs from Reuters)
