Palestinian unemployment rate set to soar to 57 per cent during first quarter of 2024 – ILO Bulletin No. 3 (Impact of the war in Gaza on the labour market and livelihoods in the Occupied Palestinian Territory)

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BEIRUT (ILO News) – Some 507,000 jobs have been lost across the Occupied Palestinian Territory (OPT) as of the end of January 2024 due to the ongoing war in the Gaza Strip, according to new estimates issued by the International Labour Organization (ILO) and the Palestinian Central Bureau of Statistics (PCBS).

The new data estimates that, as of 31 January, around 201,000 jobs were lost in the Gaza Strip, accounting for around two thirds of total employment in the enclave.

In addition, 306,000 jobs – or over one third of total employment – were also lost in the West Bank, where economic conditions have been severely impacted.

The data was presented in the Impact of the war in Gaza on the labour market and livelihoods in the Occupied Palestinian Territory: Bulletin No. 3 – the latest in a series of joint ILO and PCBS briefs outlining the impact of the hostilities on the OPT labour market.

Previous estimates   had put job losses at 468,000 jobs across the OPT.

In view of the vast job losses, unemployment in the OPT has spiked. If the hostilities continue until end of March 2024, the annual unemployment rate for all of 2024 is forecast to reach 42.7 per cent. If the hostilities continue for a second quarter – until end of June 2024 – the annual rate is projected to rise to 45.5 per cent.

At the current quarterly level, the continuation of the conflict until the end of March is set to see the OPT unemployment rate soar to a staggering 57 per cent during the first three months of 2024.

Across the OPT, the estimated job losses translate into daily labour income losses of $21.7 million US dollars (USD). These increase to USD $25.5 million per day when combined with income losses due to the partial payment of wages to civil servants and the reduced incomes of workers in the private sector.

“In addition to the devastating and catastrophic loss of life and with the people of Gaza on the brink of mass starvation, the war in Gaza has also caused an economic and social crisis that is unprecedented in the Occupied Palestinian Territory,” said ILO Regional Director for Arab States Ruba Jaradat. “In Gaza, entire neighbourhoods have been wiped from existence. Infrastructure, energy and water facilities have been demolished. Schools, medical facilities, and businesses have been destroyed. This has decimated entire economic sectors and paralyzed labour market activity, with untold repercussions on the lives and livelihoods of Palestinians for generations to come.”

“We are working with our partners and the international community to provide both immediate relief and longer-term assistance to mitigate the impact of the crisis on affected Palestinian workers and employers,” Jaradat said.

The conflict has also had a huge effect on labour supply. Labour force participation rates are projected to decline by 3.6 percentage points for men and 1.2 percentage points for women between 2023 and 2024, if the hostilities continue until mid-2024.

In terms of the OPT’s wider economy, the PCBS estimates that the OPT’s gross domestic product (GDP) contracted by a third during the last quarter of 2023 compared to a year previously, registering a decline of over 80 per cent in the Gaza Strip and 22 per cent in the West Bank. GDP is projected to decline by a further 15 per cent across the two areas of the OPT if the war continues until mid-2024.

The ILO is coordinating with other UN agencies and is implementing a three-phase programme of relief, review and recovery to support working families and employers in the OPT. The ILO has launched an appeal for $20 million US dollars to fund implementation of the response plan  and increase the capacity of the ILO to meet the tremendous needs of the population.