Stark UN Report on Devastation to Palestinian Economy Shows GDP Fell 4% after a Month of War

Palestinians walk through a ravaged street following Israeli airstrikes on Gaza City, on October 10, 2023. (AFP)
Palestinians walk through a ravaged street following Israeli airstrikes on Gaza City, on October 10, 2023. (AFP)
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Stark UN Report on Devastation to Palestinian Economy Shows GDP Fell 4% after a Month of War

Palestinians walk through a ravaged street following Israeli airstrikes on Gaza City, on October 10, 2023. (AFP)
Palestinians walk through a ravaged street following Israeli airstrikes on Gaza City, on October 10, 2023. (AFP)

A UN report paints a stark picture of the devastation of the collapse of the Palestinian economy after a month of war and Israel’s near-total siege of Gaza.

The gross domestic product shrank 4% in the West Bank and Gaza in the war’s first month, sending over 400,000 people into poverty — an economic impact unseen in the conflicts Syria and Ukraine, or any previous Israel-Hamas war, the UN said.

Hamas fighters, who rule Gaza, launched a surprise attack on Israel on Oct. 7 killing over 1,400 people, mainly civilians, and kidnapping about 240 others.

More than two-thirds of Gaza’s population of 2.3 million have fled their homes since Israel launched weeks of intense airstrikes followed by an ongoing ground operation, vowing to obliterate Hamas. The Hamas-run Health Ministry in Gaza said Thursday that 10,818 Palestinians, including more than 4,400 children, have been killed so far.

The rapid assessment of economic consequences of the Gaza war released Thursday by the UN Development Program and the UN Economic and Social Commission for West Asia was the first UN report showing the devastating impact of the conflict especially on the Palestinians, The Associated Press reported.

If the war continues for a second month, the UN projects that the Palestinian GDP, which was $20.4 billion before the war began, will drop by 8.4% — a loss of $1.7 billion. And if the conflict lasts a third month, Palestinian GDP will drop by 12%, with losses of $2.5 billion and more than 660,000 people pushed into poverty, it projects.

UN Development Program Assistant Secretary-General Abdallah Al Dardari told a news conference that a 12% GDP loss at the end of the year would be “massive and unprecedented.” By comparison, he said, the Syrian economy used to lose 1% of its GDP per month at the height of its conflict, and it took Ukraine a year and a half of fighting to lose 30% of its GDP, an average of about 1.6% a month.

At the beginning of 2023, the Palestinian territories – the West Bank and Gaza – were considered a lower middle-income economy with a poverty level of $6 per day per person, Economic Commission Executive Secretary Rola Dashti said.

In January, Gaza was already grappling with high unemployment of about 46%, three-and-a-half times higher than the West Bank’s 13%, the report said.

But just weeks of war has destroyed hundreds of thousands of jobs.

“As the war hits the one-month mark, 61% of employment in Gaza, equivalent to 182,000 jobs, is estimated to have been lost,” it said. “Around 24% of employment in the West Bank has also been lost, equivalent to 208,000 jobs.”

Al Dardari pointed to massive disruption to the economy in the West Bank, which is responsible for 82% of Palestinian GDP, explaining that this is supposed to be the season for olive and citrus farmers to collect their products but they can’t because of the war. And “the tourism season is practically gone – and agriculture and tourism represent 40% of the GDP in the West Bank," he said.

In addition, Al Dardari said, there are major disruptions to trade, to the transfer of money from Israel to the Palestinian Authority, which controls the West Bank, and no investment.

The Economic Commission’s Dashti said "the level of destruction is unimaginable and unprecedented” in Gaza.

“As of November 3, it is estimated that 35,000 housing units have been totally demolished and about 220,000 units are partially damaged,” she said. The report said at least 45% of Gaza’s housing units have been destroyed or damaged.

If this persists, the majority of Gazans will have no homes and Al Dardari said even if fighting ended now there will be massive long-term displacement, “with all its humanitarian economic development and security consequences.”

Al Dardari said it breaks his heart that the Palestinian territories had become lower middle income economies, “because all of that growth and development is going to regress between 11, 16, or even 19 years if the fighting continues. ... We will go back to 2002.”



Number of Unemployed in Germany Reaches 12-year High

People walk past the Brandenburg Gate as winter weather covers the city, in Berlin, Germany, Friday, Jan. 30, 2026. (AP Photo/Ebrahim Noroozi)
People walk past the Brandenburg Gate as winter weather covers the city, in Berlin, Germany, Friday, Jan. 30, 2026. (AP Photo/Ebrahim Noroozi)
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Number of Unemployed in Germany Reaches 12-year High

People walk past the Brandenburg Gate as winter weather covers the city, in Berlin, Germany, Friday, Jan. 30, 2026. (AP Photo/Ebrahim Noroozi)
People walk past the Brandenburg Gate as winter weather covers the city, in Berlin, Germany, Friday, Jan. 30, 2026. (AP Photo/Ebrahim Noroozi)

The number of unemployed people in Germany has hit a 12-year high, surpassing the 3 million ⁠mark, while inflation moved back above the European Central Bank's 2% target, clouding the outlook for Europe's largest economy after a stronger-than-expected end to 2025.

German Chancellor Friedrich Merz said on Friday that boosting the economy would be his main focus this year and promised to revive Europe's largest economy after two years of mild contraction with a sharp increase in infrastructure and defense spending.

While the economy as a whole is now showing greater resilience, Merz's measures are taking longer than expected to translate into better conditions on the ground, according to Reuters.

Labor Office figures on Friday highlighted the lag in the jobs market from the economic stagnation of the last few years, with 177,000 more people out of work in January than in December, bringing the total to 3.08 million.

The unemployment rate jumped by 0.4 percentage points to 6.6% in seasonally unadjusted terms.

“There is currently little momentum in the ⁠labor market,” said Labor Office director Andrea Nahles. “At the start of the year, unemployment rose markedly for seasonal reasons.”

The picture improved slightly when accounting for seasonal trends. On that basis, the Labor Office said, the number of people out of work was unchanged from December at 2.976 million and the seasonally adjusted jobless rate was steady at 6.3%.

Analysts and economists in a Reuters poll had predicted a seasonally adjusted rise of 4,000 in the jobless number.

On a brighter note, German gross domestic product grew by 0.3% in the fourth quarter compared with the previous three months, beating the consensus forecast of 0.2%. On an annual basis, the Statistics Office confirmed its first estimate of 0.2% growth.

Economy Minister Katherina Reiche said Germany must pivot toward new “growth engines,” arguing that traditional export strengths “no longer carry our growth.”

Europe's biggest economy lowered its growth forecasts for this and next year on Wednesday.

Annual inflation rose in January in five German states, preliminary data showed on Friday, suggesting the nationwide rate — due out later in the day - has also risen this month.

Price growth of 2.0% to 2.3% was recorded in North Rhine-Westphalia, Baden-Wuerttemberg, Bavaria, Saxony and Lower Saxony, and economists polled by Reuters forecast a harmonized national rate of 2.0% for January, unchanged from last month's rate.

Eurozone annual inflation, due out next Wednesday, is expected at 1.7% for January, down from 1.9% in December, according to economists polled by Reuters.


China Sees First Fiscal Revenue Drop Since 2020

FILE PHOTO: Chinese 100 yuan banknotes are seen in this picture illustration created in Shanghai on January 17 , 2011. REUTERS/Carlos Barria/File Photo
FILE PHOTO: Chinese 100 yuan banknotes are seen in this picture illustration created in Shanghai on January 17 , 2011. REUTERS/Carlos Barria/File Photo
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China Sees First Fiscal Revenue Drop Since 2020

FILE PHOTO: Chinese 100 yuan banknotes are seen in this picture illustration created in Shanghai on January 17 , 2011. REUTERS/Carlos Barria/File Photo
FILE PHOTO: Chinese 100 yuan banknotes are seen in this picture illustration created in Shanghai on January 17 , 2011. REUTERS/Carlos Barria/File Photo

China's fiscal revenue fell 1.7% in 2025 from a year earlier, the finance ministry said on Friday, the first contraction since 2020 as a protracted property slump and weak domestic demand saddled the economy.

Fiscal revenues in 2025 totaled 21.6 trillion yuan ($3.11 trillion), a ministry official said at a press briefing.

Expenditures grew 1% to 28.7 trillion yuan, slowing from 3.6% growth in 2024.
Growth in China's fiscal revenue slowed to 1.3% in 2024. Revenue dropped 3.9% in 2020 when the initial outbreak of the COVID-19 pandemic disrupted economic activities.

Tax revenue rose 0.8% in 2025, while income from non-tax sources slumped 11.3%.

Revenue from stamp taxes on securities transactions surged 57.8%, buoyed by a stock market rally.

Revenue from land sales by China's local governments declined for a fourth straight year as the property downturn rolled on, although the 14.7% drop in 2025 narrowed from a 16% fall a year earlier. These revenues have in the past been a key driver for local economic growth measures and the sharp drop has strained local authorities' coffers and weighed on overall business activity.

China's economy grew 5.0% in 2025, meeting the government's target, as strong global demand for goods helped offset weak domestic consumption - a phenomenon that economists warn will be difficult to sustain.

Chinese leaders have pledged to continue to implement a more proactive fiscal policy this year and maintain the necessary fiscal deficit, overall debt levels and expenditure scale to support broader economic growth.

In a separate development, China is considering the sale of hundreds of billions of yuan in special government bonds to recapitalize some of its largest insurers, Bloomberg News reported on Friday citing people familiar with the matter, strengthening the biggest players in a sector facing consolidation pressures.

The potential bond sale would raise about 200 billion yuan ($28.8 billion) to help recapitalize the insurers, the report said, adding that the proceeds will be injected into state-controlled firms including China Life Insurance Group Co, the People's Insurance Co Group of China Ltd (PICC), and China Taiping Insurance Group Co.

The capital injection could be announced as early as this quarter, one of the people said, according to the report.

It would mark the first time China has used special bonds to support insurers, extending a financing tool previously reserved for state-owned banks.

The initiative could help bolster insurers that were directed to support the stock market during last year's volatility, while positioning them to help regulators manage smaller, higher-risk insurance companies.

In January last year, China unveiled plans to channel hundreds of billions of yuan in investment from state-owned insurers into shares to support the stock market.

Insurance companies' equity investments as a proportion of their total investment assets rose to 10.03% in the third quarter of 2025 from 7.51% in 2022, according to estimates from China Securities.

The potential recapitalization also comes as the insurance sector grapples with eroding profitability due to persistently low interest rates, with numerous small and mid-sized insurers reporting deteriorating solvency ratios in the third quarter last year.

Last year, China's finance ministry unveiled a recapitalization plan of around $72 billion to boost big state banks' core capital, a move aimed at helping lenders manage lower profit margins and asset-quality strains.


Oil Edges Lower after Trump Signals Dialogue with Iran over Nuclear Program

A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer
A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer
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Oil Edges Lower after Trump Signals Dialogue with Iran over Nuclear Program

A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer
A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer

Oil prices slipped on Friday on signs that the US may engage in dialogue with Iran over its nuclear program, reducing concern over potential supply disruptions from a US attack.

Brent crude futures were down 21 cents, or 0.3%, at $70.50 a barrel by 1219 GMT. The March contract expires later on Friday. The more active April contract lost 45 cents, or 0.65%, to $69.14.

US West Texas Intermediate crude fell 38 cents, or 0.6%, to $65.04 a barrel, Reuters reported.

"President Trump’s willingness to give diplomacy a chance regarding Iran seemingly makes a US military intervention less likely than yesterday," said PVM Oil Associate analyst Tamas Varga.

Middle East tensions and oil prices had increased this week as the US strengthened its military presence in the region. US President Donald Trump urged Iran on Wednesday to make a deal on nuclear weapons or face an attack but on Thursday said he was planning to speak to the country's leaders.

Despite Friday's declines, benchmark prices remained on track for large monthly gains. Brent crude was set for its biggest monthly jump since January 2022 and WTI was poised for its largest monthly gain since July 2023.

Price pressure also came from a rise in the dollar after it hit a four-year low earlier in the week. Friday's dollar strength followed Trump's announcement that he would pick former Federal Reserve Governor Kevin Warsh to head the US central bank when Jerome Powell's leadership term ends in May.

A stronger dollar can limit demand from oil buyers paying in other currencies.

"Rising US crude oil output after shutdowns and Kazakhstan nearing the resumption of production at the Tengiz oilfield also contribute to the change in sentiment, and given the week’s bullish performance, it is reasonable to expect some profit-taking ahead of the weekend," Varga added.

Meanwhile, peak maintenance periods for Russian primary oil refining this year are expected this month and in September, based on Reuters calculations using estimates from industry sources.

A Reuters poll of 32 analysts found that most expect prices to hold near $60 a barrel this year as the prospect of oversupply offsets potential disruption from geopolitical tensions.