West Bank hemorrhages $24 million daily due to war, Palestinian economy on the brink

These frozen tax revenues alongside the loss of millions of dollars that were previously pumped into the West Bank economy by Palestinians legally and illegally employed in Israel have resulted in the local economy being utterly devastated.

Unemployed Palestinians who lost their jobs in the aftermath of the Hamas attack are not covered by unemployment benefits, a service not provided by the PA. This situation was highlighted by an owner of a small supermarket in the West Bank, as quoted by the AFP agency.

The owner reports that his sales have dropped by 70 percent, with customers limiting their purchases to only basic goods. He had to discontinue supplying groceries on credit as customer debt reached 40 percent of sales. Consequently, he had to lay off half of his six employees; two more are set to lose their jobs by December. Voice of America noted similar struggles among local craftsmen whose customers are out of funds to place orders and the cost of production materials have significantly increased.

The situation in the Gaza Strip, a region encapsulated in conflict, is alarmingly worse. In 2005, when Israel withdrew completely from Gaza, the economy of this semi-enclave contributed to over a third of Palestinian production. However, this has seen a steady decrease, shrinking to a mere 17 percent last year. Following the Hamas attack on October 7th, the unemployment rate surged from approximately 45 to 85 percent, as observed by the Times of Israel portal.

Contrary to its earlier forecast of growth in Palestinian GDP in 2024, the World Bank now predicts a decline of 6 percent. This estimate, however, assumes that the intensity of the conflict will subside. They estimated that prices increased by 12 percent in Gaza in October only, following the onset of the war. During the same timeframe, consumer inflation in the West Bank only increased by 0.1 percent.

A trade ship in the Red Sea, MSC PALATIUM III, owned by a Swiss company, was attacked by the Iran-backed Houthis. The ship was heading north, about 25 miles southwest of the Yemeni port of Mokka, as reported by the British maritime security firm Ambrey.

The ship, initially en route to the Saudi port of Jeddah, received a warning from the Houthis, advising against passing through the Red Sea. Ambrey added that despite this warning, the ship continued its northward journey, but then abruptly changed course, sailing southward towards the Bab Al-Mandab Strait about 30 minutes later.

This is not the first Houthi attack in the Red Sea. Earlier on Friday, a Liberian-flagged container ship was attacked by the Houthis. The ship caught fire after being hit by a missile launched from a region of Yemen controlled by the Houthis.