Unemployment in Gaza has surged to nearly 80% since the outbreak of the Israel-Hamas conflict, the International Labour Organization (ILO) reported on Thursday, signalling an almost total collapse of the enclave’s economy. The ongoing war has decimated Gaza’s economic output, which has shrunk by an astonishing 85%, plunging the vast majority of the 2.3 million residents into deep poverty.
The ILO emphasized the profound economic devastation across the Occupied Palestinian Territory, including both Gaza and the West Bank. “Unprecedented and wide-ranging devastation on the labor market” has become evident as businesses shuttered and livelihoods were destroyed in the wake of the conflict. In the West Bank, although the unemployment rate is lower than in Gaza, it has still reached a staggering average of 34.9% over the past year. The West Bank’s economy has contracted by 21.7% compared to the previous 12 months.
Prior to the war, Gaza already faced steep economic challenges, with an unemployment rate of 45.3%. The West Bank, by comparison, had a pre-war unemployment rate of 14%. However, the current conflict has amplified these struggles, with many workers in Gaza either losing their jobs entirely or resorting to informal, irregular work focused primarily on providing essential goods and services amid the war-torn environment.
The conflict escalated dramatically after the October 7 attacks, when Hamas-led gunmen killed around 1,200 Israelis and took approximately 250 hostages. In response, Israel launched an intensive military campaign in Gaza, resulting in the deaths of more than 42,000 people, according to Gaza health authorities. Israel has stated that its operations are aimed at eliminating Hamas militants, who are said to be hiding in tunnels and among the civilian population.
Adding to the already dire situation, U.N. satellite data reveals that over 163,000 buildings in Gaza have been damaged or destroyed, representing two-thirds of the region’s pre-war structures. This physical destruction has further crippled an already struggling economy and left tens of thousands of people without homes or places to work.
The effects of the war have not been confined to Gaza alone. The West Bank, already under economic strain, has seen significant disruptions in trade and movement. Israeli barriers and restrictions on the flow of goods and people have exacerbated the economic crisis, with Israel asserting that such measures are necessary to counter Iranian-backed militant groups and protect Israeli civilians from harm.
Ruba Jaradat, the ILO’s regional director for Arab states, noted that the consequences of the war go far beyond the immediate loss of life and destruction of infrastructure. “It has fundamentally altered the socio-economic landscape of Gaza, while also severely impacting the West Bank’s economy and labor market. The impact will be felt for generations to come,” Jaradat said, underscoring the long-term ramifications of the conflict.
Despite some humanitarian aid efforts, the combined effects of war, economic isolation, and physical destruction have created a bleak future for Gaza’s population. The ILO’s report paints a stark picture of an economy in freefall, with poverty deepening and the prospects for recovery seeming increasingly distant. The humanitarian crisis, coupled with economic collapse, is likely to leave a lasting scar on the region’s socio-economic fabric for years, if not decades.
As the conflict continues, both Gaza and the West Bank will likely face further economic deterioration, with millions of lives affected by the devastating toll of war.
