The Great Bifurcation

How the post-October 2023 conflict fractured the Palestinian digital economy into two distinct trajectories: annihilation in Gaza and recession in the West Bank

Data Source: Palestine Digital Economy Report Synthesis (2025)

Pre-Conflict Baseline (2019-2023)

3.2%
of GDP
($493M)
$85M+
ICT Exports
(2017)
80%
Internet Access
Households
250-300
Startups
Tech Ecosystem

Gaza: Annihilation

GDP Contraction -86%
H1 2024
Telecom Infrastructure Destroyed 75%
Oct 2024
Bank Branches Damaged/Destroyed 93%
Jul 2024
Operational Towers 30%
Oct 2024
Humanitarian Crisis
  • • Universities destroyed (100%)
  • • Tech talent displaced/lost
  • • Equipment blockade since Mar 2025
  • • Reconstruction cost: $90M+

West Bank: Recession

ICT Establishments Decline -43%
Licensed firms (2024)
Palestine-wide Job Loss 500K
May 2024
Movement Restrictions 849+
Documented obstacles (2025)
Infrastructure Status 3G Only
4G/5G still denied
Systemic Suppression
  • • 4G licensing stalled
  • • Israeli network expansion accelerating
  • • Market paralysis from restrictions
  • • Brain drain accelerating

Palestine-Wide Economic Impact

-26.6%
GDP Contraction
2024 Projection
500,000
Jobs Lost
May 2024
$90M+
Reconstruction Cost
Telecom only (initial)

Key Insight

The Palestinian digital economy has been systematically fractured into two divergent realities: Gaza faces total annihilation of its digital infrastructure and human capital, requiring massive reconstruction, while the West Bank experiences economic strangulation through market restrictions and continued denial of competitive technology (4G/5G), even as Israeli competitors expand their networks in the same territory.

Paradox of Resilience
The sector that was once the beacon of digital resilience against physical restrictions has become both the primary casualty of the conflict and the most critical tool for humanitarian response and future recovery.