Economic impact of the Gaza war

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The Gaza war has significant economic implications. The number of Palestinians living in poverty has surged dramatically, with an additional 300,000 people falling into poverty by November 2023. The war caused a severe economic downturn, with employment in the Gaza Strip plummeting by 61% and the West Bank by 24% between October and November 2023. By March 2024, unemployment in the Palestinian Territories had soared to 57%, resulting in 500,000 job losses.

Gaza's infrastructure and economy were struggling before the conflict, with 61% of the population living below the poverty line. The war exacerbated these conditions, causing extensive damage to homes, hospitals, schools, water and sanitation systems, and food security. The United Nations Development Programme (UNDP) reported that the conflict had set back human development in Gaza and the West Bank by 11–16 years. By the end of December 2023, the Palestinian economy had lost $1.5 billion, with Gaza's economy shrinking by 80% in the fourth quarter. In May 2024, it was reported that $50 billion in investments had been wiped out, plunging 1.8 million people into poverty.

Following the October 7 attacks, Israel restricted 100,000 Palestinian laborers from entering Israel for work, severely impacting their incomes. The increased Israeli military presence and settler violence further hindered mobility and economic activity. The situation was further exacerbated by Israel's withholding of tax revenues, affecting the pay of about 143,000 workers between October and December 2023. The economic impact was particularly severe in Hebron's Old City, where 80% of businesses closed due to curfews and restrictions imposed by the Israeli Defense Forces (IDF). The conflict and economic measures have had devastating effects on the livelihoods and stability of Palestinians in both Gaza and the West Bank.