Palestinian gross domestic product contracted by 24% in 2025 compared with 2023, while the unemployment rate reached 46% as of early September 2026, standing at 28% in the West Bank and 78% in the Gaza Strip, according to data from the Palestinian Ministry of Economy, as the impact of Israeli restrictions on movement, trade and production intensified.
Checkpoints drive up production and transport costs
Restrictions on movement between West Bank cities have disrupted the passage of workers and goods and raised transport and production costs, with extended waiting times at Israeli military checkpoints leading to spoilage of perishable goods and lost working hours.
In one case, a dairy and cheese factory in the village of Rujeib, southeast of Nablus, lost about 20,000 shekels, equivalent to about 6700 dollars, after roughly 10 tonnes of milk spoiled during five hours of waiting at an Israeli checkpoint.
Factory owner Bassam Dweikat said marketing had fallen to 40% of its level in previous years, while distribution vehicles sometimes waited three or four hours before turning back without completing their routes. The factory was forced to let more than 12 workers go because of declining production and sales.
2.8 million shekels in daily losses
A study published by the Palestine Economic Policy Research Institute (MAS) in March 2025 found that transport activity had fallen by 51.7% after October 2023, while recorded waiting times at 14 military checkpoints ranged from 15 to 50 minutes.
The study estimated the average delay on journeys outside Nablus governorate at about 42 minutes, an increase of 77.9% over the original journey time. It also estimated daily lost working hours at about 191,000 hours, with a cost of about 2.8 million shekels a day, or 62.2 million shekels a month.
The additional routes taken by drivers to avoid checkpoints result in extra fuel consumption estimated to cost about 71,000 shekels, equivalent to 22.2 million shekels a year, according to the study.
Broader pressure on economic activity
The total number of Israeli military checkpoints and gates in the West Bank reached 925, including 147 in Nablus alone, according to the Wall and Settlement Resistance Commission. This makes it more difficult for workers, raw materials and products to move between governorates and limits businesses' access to their markets.
Preliminary estimates from the Palestinian Central Bureau of Statistics showed that gross domestic product in Palestine fell by 8% in the first quarter of 2026 compared with the fourth quarter of 2025. Construction activity declined by 17%, manufacturing, mining, water and electricity by 12%, and services by 4%. Gross domestic product during the quarter stood at 2,789 million US dollars in the West Bank and 167 million US dollars in the Gaza Strip.
