The ongoing war in the Gaza Strip has inflicted an unprecedented level of devastation on the Palestinian labour market and the broader economy, according to a new brief released by the International Labour Organization and the Palestinian Central Bureau of Statistics. The eight-month conflict has resulted in massive job losses, shattered livelihoods, and a sharp decline in GDP across the Occupied Palestinian Territory.
Since the outbreak of hostilities in October 2023, the unemployment rate in the Gaza Strip has soared to an astonishing 79.1%, while the West Bank, also severely impacted by the crisis, has witnessed an unemployment rate of 32%. These figures bring the average unemployment rate across the two areas of the OPT to a staggering 50.8%. However, these numbers do not account for individuals who have completely left the labour force due to the lack of job prospects, suggesting that the actual number of those who have lost their jobs is even higher than the official unemployment figures indicate.
In addition to the alarming unemployment rates, the brief highlights the severe contraction of the economy in the OPT. Real GDP has plummeted by an astounding 83.5% in the Gaza Strip and by 22.7% in the West Bank over the past eight months. On average, the real GDP of the entire OPT has shrunk by 32.8%, painting a grim picture of the economic toll the war has taken on the region.
The private sector has been particularly hard hit by the economic crisis resulting from the conflict. In the Gaza Strip, nearly all private sector establishments have either completely ceased operations or significantly reduced their production levels. During the first four months of the war, the sector lost 85.8% of its production value, equivalent to $810 million. Similarly, the West Bank's private sector suffered a 27% reduction in production value, amounting to $1.5 billion during the same period. Across the entire OPT, the private sector has incurred daily production losses of approximately USD $19 million during the initial four months of the conflict.
Ruba Jaradat, ILO Regional Director for Arab States, emphasized the urgent need to restore livelihoods and create decent jobs for Palestinians in the OPT, stating, "Restoring people's livelihoods and creating decent jobs is vital to enabling Palestinians in the Occupied Palestinian Territory to recover from the horrors the war has inflicted on them. This recovery work must take place alongside the ongoing humanitarian response, and the ILO and its constituents and partners are implementing an Emergency Response Plan to this end."
The fourth bulletin also provides projections for the impact of the war on the OPT economy and labour market for the entire year of 2024. If the war were to end in August 2024 and economic and labour market recovery efforts were to follow, the annual unemployment rate for 2024 is expected to average 47.1%. Under this scenario, real GDP would plummet by 16.1%, and real per capita income would decline by 18.0% in 2024 compared to 2023, representing the most significant decline in growth rates for both indicators in over two decades.
The bulletin further examines the impact of the war in Gaza on workers and employers in the West Bank, where closures by Israel, movement restrictions, and settler attacks have disrupted supply chain networks and transportation routes. An ILO survey conducted in partnership with the Palestinian General Federation of Trade Unions found that among West Bank workers who are still employed, 51% faced reduced working hours, and 62.8% experienced a reduction in wages. A separate survey conducted by the ILO and the Federation of Palestinian Chambers of Commerce, Industry, and Agriculture revealed that 65.3% of West Bank enterprises reported a reduction in their workforce, with many resorting to permanent or temporary layoffs.
