The ongoing war in Gaza has led to a severe economic collapse, with the unemployment rate in the Gaza Strip skyrocketing to nearly 80%. According to the latest bulletin, A Year of War in Gaza: Impacts on Employment and Livelihoods in the West Bank and Gaza Strip, published by the ILO and the Palestinian Central Bureau of Statistics (PCBS), unemployment across Gaza and the West Bank averaged 51.1% over the past year. In Gaza, the figure reached a staggering 79.7%, while the West Bank saw an unemployment rate of 34.9%.
The war’s impact has been profound. It has resulted in the most significant economic downturn in recent history for the Occupied Palestinian Territories (OPT). Gaza’s GDP contracted by an astonishing 84.7% over the last year, while the West Bank saw a 21.7% decline. Together, the OPT’s real GDP dropped by 32.2%. This signifies an economic contraction that has never been seen before. It is even worse than during the second Palestinian uprising in 2001, when GDP fell by 14.9%.
UNPRECEDENTED SCALE OF ECONOMIC DECLINE
This unparalleled economic collapse has reshaped the socio-economic landscape of Gaza. According to Ruba Jaradat, ILO Regional Director for Arab States, “The war in Gaza has significantly affected the socio-economic landscape. It goes beyond loss of life and physical destruction. Gaza’s economic collapse will be felt for generations.”
POVERTY AND LIVELIHOOD STRUGGLES
Nearly the entire population of Gaza now lives in poverty. Families struggle to meet basic needs due to destroyed homes, displacement, and a lack of jobs. The bulletin highlights informal and irregular work in Gaza. This work is often centered around essential goods and services. It is all that remains in much of the area. The near-total shutdown of economic activities has pushed most people into poverty.
Meanwhile, the West Bank is also facing severe economic hardship. The poverty rate there more than doubled from 12% in 2023 to 28% by mid-2024. Israeli-imposed restrictions on the movement of goods and people have worsened the situation. Trade disruptions have compounded the challenges. The closure of Israel’s labour market to Palestinian workers has severely strained the economy and livelihoods in the West Bank.
OBSTACLES TO RECOVERY
The report emphasizes that the road to recovery for the OPT is fraught with challenges. In Gaza, the destruction of critical infrastructure, combined with recurring displacement, has made the resumption of regular work nearly impossible. In the West Bank, the Israeli barriers to movement and trade are major obstacles. These barriers hamper economic activities and limit access to essential markets.
The war has destroyed homes and businesses. It has also pushed most workers into the informal economy. This economy lacks stability, security, and access to benefits. This economic fragility is expected to worsen as the war continues.
A GENERATIONAL TOLL
The bulletin underscores that the economic collapse in Gaza and the West Bank will have long-lasting effects. With unemployment soaring and GDP plummeting, the impact on future generations will be profound. The war’s economic toll compounds the already desperate humanitarian situation, leaving little hope for a swift recovery. Economic rebuilding will need massive international aid. This aid is necessary even in the post-conflict period. Restrictions need to be eased to restore livelihoods and rebuild the infrastructure.