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Gaza war could cause a potential GDP drop of 2.3% in Arab economies: UN study

Economic cost of the war could reach $10 billion this year for Arab neighbors, pushing over 230,000 into poverty

Gaza war could cause a potential GDP drop of 2.3% in Arab economies: UN study
[Source photo: Anvita Gupta/Fast Company Middle East]

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The ongoing war in Gaza has cast a long shadow across the Arab world,  inflicting an economic blow on neighboring Lebanon, Egypt, and Jordan, according to a new United Nations Development Programme (UNDP) study. 

This grim prognosis adds to the already struggling economies of these nations, grappling with fiscal pressures, sluggish growth, and rampant unemployment.

The UNDP study estimates a 2.3% loss in GDP, translating to a staggering $10.3 billion for the three countries combined. Should the conflict drag on for another six months, this figure could double, further deepening the region’s economic woes.

According to the study, the war has deterred much-needed investment and dealt a heavy blow to consumption and trade. The war’s impact could be particularly devastating for Lebanon, already mired in a deep economic crisis.

The war’s economic fallout could also push over 230,000 people into poverty, exacerbating existing social inequalities and adding another layer of hardship to an already vulnerable population.

“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,” Abdallah Al Dardari, UN assistant secretary-general and UNDP’s Director of the Regional Bureau for Arab States (RBAS), who led the study, told Reuters.

The destruction in Gaza, saying it is unprecedented, with 45-50% of housing units destroyed in just one month. This figure surpasses even the devastation of World War Two.

The war has laid much of the Gaza Strip to waste, with more than 18,000 people dead, according to Palestinian health authorities, as well as the mass displacement of almost 80% of Gaza’s population.

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