Gaza’s economy shrinks to survival as unemployment hits 78%

In Gaza, even charging a phone or collecting water now takes planning and resources that many families no longer have. Jobs have vanished, cash is scarce and prices remain around 200% above their prewar levels. Three years after the war began, the struggle to secure everyday necessities has become the centre of economic life, according to an Al Jazeera report published on October 7, 2026.

The scale of the damage reaches far beyond lost household income. In September, the UN Conference on Trade and Development estimated that 92% of Gaza’s economic establishments had been damaged or destroyed since October 2023. Unemployment had reached 78%. Gross domestic product per person — a measure of economic output divided by the population — stood at $212 in 2025, about 17% of its 2022 level.

Work disappears, costs stay high

The industries that could provide jobs and materials have been severely weakened. Agriculture and industry were each producing just 6% of their 2022 output, while construction was at 1%. Restrictions on goods entering and leaving Gaza have compounded the losses. Most of the territory’s trade with the outside world has historically passed through Israeli-controlled crossings, Al Jazeera reported.

For households, that means sharply reduced buying power. The UN put September prices at around 200% above levels before October 2023. Families increasingly depend on humanitarian cash assistance, borrowing and small informal jobs. With physical money in short supply, digital payments and electronic wallets have become alternatives. Economic researcher Rami al-Zaygh told Al Jazeera that people were returning to old trades and finding work using simple tools and whatever materials remained available.

The war has “pushed society back decades”, economic researcher Rami al-Zaygh told Al Jazeera.

The breakdown of basic services adds another burden. Gaza has no functioning electricity grid, leaving households and essential services reliant on generators and scarce fuel, engine oil and spare parts. Damaged roads and communications networks make travel and access to services harder. According to the UN, 91% of assessed households faced moderate-to-high water insecurity in early August, up from 84% in June.

Recovery faces more than a funding gap

Housing needs remain overwhelming. In September, the UN said 94% of the population urgently needed shelter and basic household assistance, while 65% of households lived in tents or makeshift shelters. Military control and access restrictions also limit where people can live and work. Euro-Med Human Rights Monitor said those restrictions covered around 70% of Gaza in September, concentrating more than two million Palestinians in less than 30% of the territory.

The damage to education and healthcare threatens longer-term prospects. UNICEF said nearly 98% of schools had been damaged or destroyed. By April 2026, around 700,000 children aged four to 17 had missed almost three consecutive years of in-person schooling. The World Health Organization said all 36 hospitals had sustained damage; only 19 were functioning, none at full capacity. Shortages were disrupting cancer treatment, dialysis and care for chronic illnesses.

The next developments to watch are access to supplies, rehabilitation of essential services and the unresolved administrative transition. Hamas said in July it would transfer administrative powers to the National Committee for the Administration of Gaza, a Palestinian technocratic body, but that handover has not happened. The WHO has called for sustained humanitarian access, medicines and equipment, repaired health facilities and more medical evacuations. Those needs remain pressing despite the ceasefire announced in October 2025.