West Bank and Gaza

West Bank and Gaza: steady but modest growth, 1994–2024

The Palestinian economy, operating under Israeli occupation and movement and trade restrictions since 1967, has depended heavily on aid, public-sector jobs, and work in Israel; the war that began in October 2023 devastated Gaza's economy and sharply contracted the West Bank's. Between 1994 and 2024, West Bank and Gaza's GDP per capita grew from $1,202 to $2,592 (current US$), a compound annual growth rate of 2.6% — steady but modest growth. Annual GDP growth averaged 3.1% with a year-to-year standard deviation of 9.5 points, reflecting considerable volatility and periodic crises. Structurally, agriculture's share of the economy moved from 13.3% to 5.7% of GDP (a classic decline as the economy industrialized/modernized), while services rose from 53.5% to 58.5% of GDP, underscoring a shift toward a services-driven economy. On human development, life expectancy rose from 67.8 to 69.2 years, while tertiary school enrollment moved from 15.8% to 44.5%, while the urban population share grew from 62.1% to 87.1%.

What this growth cost: Growth was not without cost: income inequality (Gini index) widened from 34.0 to 36.4; the poverty headcount ratio increased from 1.8% to 2.1%.