More than half a million jobs (507,000) have been lost across the Occupied Palestinian Territory (OPT) as of the end of January 2024 due to the ongoing conflict 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.

As a result of the job losses, unemployment in the OPT has spiked. According to the ILO, If the hostilities continue until end of March 2024, the annual unemployment rate for all of 2024 is forecast to reach 42.7%. If the hostilities continue for a second quarter, until end of June 2024, the annual rate is projected to rise to 45.5%.

The unemployment rate in Israel has increased slightly according to the latest data moving from 3.2% in January 2024 to 3.3% in February.

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 57% during the first three months of 2024.

Across the OPT, the estimated job losses translate into daily labour income losses of USD 21.7 million. 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.

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

The Bureau 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% in the Gaza Strip and 22% in the West Bank. GDP is projected to decline by a further 15% across the two areas of the OPT if the war continues until mid-2024.