The director of the International Monetary Fund announced that the war between Israel and Hamas has destroyed the economies of both the besieged Gaza Strip and the occupied West Bank, adding that only “permanent peace” will improve prospects.

Kristalina Georgieva told the World Government Summit in Dubai that “the poor prospects for the Palestinian economy are getting worse as the conflict continues.”

She continued, “Only permanent peace and a political solution will change it radically (…) From an economic standpoint, the impact of the conflict has been devastating.”

The war broke out on October 7 following an unprecedented attack by Hamas on southern Israel that killed more than 1,160 people, most of them civilians, according to a tally prepared by Agence France-Presse based on official Israeli figures.

Also, about 250 hostages were taken in the attack, and Israel says that 132 of them are still being held in Gaza, and at least 29 of them are believed to have been killed, according to figures issued by Netanyahu’s office.

Since then, Israel has responded with a concentrated bombing campaign followed by a massive ground attack in the Gaza Strip, killing 28,176 people, most of them women and children, according to the latest tally of the Hamas Ministry of Health.

According to Georgieva, economic activity in the sector declined by 80 percent in the period from October to December compared to the previous year.

She added that in the West Bank, the decline reached 22 percent.

Outside the Palestinian territories, the war between Israel and Hamas has also harmed the tourism sectors of neighboring countries such as Egypt and Lebanon.

In the Middle East and North Africa, GDP growth is expected to improve compared to last year, but is likely to fall below previous IMF forecasts, partly due to the war between Israel and Hamas, the Fund said in its latest forecast last month.

The Fund expects the region’s economies to expand by 2.9% this year, a decrease of half a percentage point from its October forecast.