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Al Mezan warns: in Gaza, the global recession and financial crisis are bringing hundreds of thousands of Palestinians to their knees

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12 February 2023 |Reference 12/2023

The prices of goods and commodities increased dramatically in the Gaza Strip due to the impact of the COVID-19 pandemic on supply chains and continued to rise due to the Russian invasion of Ukraine. The costs of basic commodities such as flour, rice, sugar and cooking oils have risen the most, exacerbating the already terrible humanitarian conditions caused by Israel’s settler-colonial closure and blockade of the Gaza Strip, which has now been in place for almost 16 consecutive years.


According to data provided to Al Mezan by the Palestinian Ministry of Economy, in recent months the price of flour has increased by 22.7 percent, sugar by 24.5 percent, meat by 5.5 percent, cooking oil by 11.1 percent, fuel by 7.5 percent, solar energy by 12.7 percent, and eggs by 27.2 percent. Meanwhile, in 2022 the unemployment rate among the labor force has reached 47 percent, while the percentage of workers in the private sector earning less than the Gaza minimum wage reached 90 percent.


A.L., a merchant residing in the North Gaza District, told Al Mezan: “After the crazy hike in food prices, the purchasing power of customers has decreased, mainly because they cannot buy basic products and pay their debts at the same time. As a result, the sales rate in my shop has decreased by 40 percent.” In another testimony, a food importer told Al Mezan: "There has been a remarkable increase in the prices of basic commodities, especially flour and sugar, as a result of the Russian-Ukrainian conflict, which caused many traders to be unable to pay the costs of the imported goods because customers—especially those with limited incomes—have become more indebted. Furthermore, as the rate of sale of non-essential foodstuff has decreased, many merchants have begun to sell their commodities at prices below market value.”  


Moreover, figures published by the Palestinian Central Bureau of Statistics (PCBS) indicate that the poverty rate in the Strip has reached 53 percent, with one-third (33.7 percent) of Gaza residents living in extreme poverty. According to the Palestine Economic Policy Research Institute, rising prices are accompanied by widespread unemployment, poverty, and extreme poverty rates—with data indicating that approximately 64 percent of households in Gaza are food insecure. In January 2023, the UN Office for the Coordination of Humanitarian Affairs reported that 58 percent of Gaza Strip residents require humanitarian aid, and a large number of households are subjected to severe, extreme, or catastrophic conditions.


On top of the closure, Israel’s repeated indiscriminate military attacks on civilian infrastructure, including industrial facilities and agricultural holdings, have further contributed to the deterioration of the economic and humanitarian situation—with Gaza still slowly recovering after Israeli aggressions in 2014, 2021, and 2022.


Al Mezan is deeply concerned about the impact of rising commodity prices on Gaza's population, particularly vulnerable groups, with impacts on their fundamental rights, particularly economic, social, and cultural rights, and an increase in people experiencing malnutrition and food insecurity. Al Mezan also reiterates that the continuing humanitarian and economic crisis in Gaza is purely man-made, its root causes being primarily Israel’s 55-year-old illegal military occupation, the 16-year settler-colonial closure and blockade, and repeated military attacks targeting civilians and civilian infrastructure in the Strip.


Accordingly, Israel must immediately, fully, and unconditionally lift the illegal closure and blockade of the Gaza Strip and end all associated unlawful restrictions imposed on the movement of people and goods to and from the Strip that have made the Gaza uninhabitable and violate the full spectrum of rights owned by Israel as the occupying power to more than two million Palestinians residing therein and amounts to a collective punishment prohibited under international law.


Palestinian authorities should also take immediate action to address the issues of unemployment and poverty in the State of Palestine, particularly the Gaza Strip, and review the system of tax deductions to improve living conditions and to protect the vulnerable and poor. Al Mezan also calls on international and relief organizations to expand their roles in combating poverty, assisting in humanitarian and economic development, and developing programs and projects that contribute to economic development in order to reduce poverty in the occupied Palestinian territory.