IMF: The Peace Agreement in Gaza Opens the Door to Sustainable Economic Recovery

Petya Kuyeva-Brooks, Deputy Chief Economist at the International Monetary Fund, said on Tuesday that the peace agreement between Israel and Hamas — which ended a two-year war in the Gaza Strip — represents a real opportunity for achieving long-term economic recovery in the region.

Kuyeva-Brooks explained that the fund is ready to cooperate with the international community to support efforts to revive Gaza, alongside assisting neighboring economies that have been severely affected by the conflict, such as Egypt and Jordan.


Extent of Destruction and Reconstruction Estimates

For its part, the United Nations Development Programme estimated the amount of debris resulting from the war in Gaza at about 55 million tons, while joint estimates from the United Nations, the European Union, and the World Bank indicate that reconstruction will require about 70 billion dollars.

Jaco Sillers, the UN Special Representative in Palestine, stated during a press conference today that there is a need to provide 20 billion dollars during the first three years of the reconstruction process, noting that priorities focus on basic infrastructure, housing, and public services.

Contraction of the Palestinian Economy

The IMF indicated that the Palestinian economy in the West Bank and Gaza Strip contracted by 26.6% during 2024, without providing specific forecasts for the current and next years, amid ongoing uncertainty regarding security and political conditions.

Gradual Improvement in the Egyptian Economy

In a related context, Kuyeva-Brooks announced that the fund has raised its expectations regarding economic growth in Egypt, predicting that real GDP will increase by 4.3% in 2025 and 4.5% in 2026.

She explained that the improvement is attributed to the recovery of the tourism and non-oil manufacturing sectors, which compensated for the decline in Suez Canal revenues due to the regional conflict, noting that activities in the canal and the mining sector are likely to see a clear recovery in 2026.