IMF projections assume 'high intensity' Gaza war to last through Q1

Palestinian militant group Hamas led a surprise attack on southern Israeli towns on Oct. 7, in which 1,200 people were killed and more than 240 seized as hostages. Israel responded with an air and ground offensive in Gaza which has displaced most of the coastal strip's 2.3 million people and plunged it into a humanitarian catastrophe.

The International Monetary Fund (IMF) said on Wednesday that its projections assumed that the Gaza war would continue with "high intensity" through the first quarter of 2024, and that hostilities would then slowly decline.

The IMF said "real GDP growth in (the) West Bank and Gaza is estimated to have dropped to about -6%" for 2023, a 9-percentage-point downgrade from its October regional outlook. "We project that the economy will keep on contracting in 2024 if there is no fast and quick cessation of hostilities and reconstruction," said Jihad Azour, the IMF's director for the Middle East and North Africa.

The IMF's updated regional outlook, issued on Wednesday, said that under an assumption that the conflict "gradually eases, positive growth is projected to resume from a very low base, and inflation is expected to gradually ease". Palestinian militant group Hamas led a surprise attack on southern Israeli towns on Oct. 7, in which 1,200 people were killed and more than 240 seized as hostages.

Israel responded with an air and ground offensive in Gaza which has displaced most of the coastal strip's 2.3 million people and plunged it into a humanitarian catastrophe. Gaza health authorities say 26,900 Palestinians have been killed in the conflict, including 150 over the past 24 hours.