The International Labour Organization (ILO) has issued a new brief highlighting the devastating impact of the two-year war in Gaza on the West Bank’s economy and labour market. The report reveals a sharp decline in livelihoods, rising unemployment, and deepening poverty across the Occupied Palestinian Territory, emphasizing that the prolonged conflict has left lasting economic and social consequences.
Titled The two-year war in Gaza: Impacts on employment and livelihoods in the West Bank (Bulletin No. 6), the publication is part of a joint series by the ILO and the Palestinian Central Bureau of Statistics that tracks how the ongoing crisis continues to disrupt employment and living conditions in Gaza and the West Bank, including East Jerusalem.
The report notes that the war’s effects have extended far beyond Gaza, with severe repercussions in the West Bank. Increased Israeli movement restrictions — including over 800 checkpoints — have disrupted access to jobs, markets, and essential services. Meanwhile, heightened settler violence, destruction of refugee camps, and the expansion of Israeli settlements have further eroded stability. Economic pressures have intensified due to Israel’s suspension of Palestinian work permits, the withholding of customs revenues, and a liquidity crisis linked to the Israeli Shekel shortage, all of which have weakened the financial system and business operations.
According to the bulletin, real GDP in the Occupied Palestinian Territory dropped by 29 percent between early 2023 and 2025, while the West Bank, including East Jerusalem, saw a 17.1 percent contraction. Despite a brief rebound in early 2025, economic output remains well below pre-war levels. The situation worsened midyear due to the currency crisis, regional escalation, and tighter Israeli controls.
Unemployment has surged to alarming levels, reaching 31.7 percent among men and 33.7 percent among women in the first quarter of 2025. Living standards have declined sharply, with real per capita income in the West Bank falling by over 20 percent compared to 2023. Projections indicate that by the end of 2025, overall unemployment could rise to 38.5 percent, leaving more than 360,000 Palestinians without work.
ILO Regional Director for Arab States Ruba Jaradat stressed that the findings underscore the urgent need for coordinated action to support jobs, businesses, and social protection in the context of the ceasefire. She also called for long-term structural reforms and international backing for the Palestinian Authority’s recovery efforts to build sustainable economic resilience.
The ILO’s ongoing bulletin series aims to provide data-driven insights for policymakers and development partners, helping guide both immediate humanitarian interventions and long-term strategies for rebuilding livelihoods and ensuring inclusive recovery in the State of Palestine.
