Despite confronting significant challenges, in 2021 the Palestinian economy started to recover from the severe impact of the COVID-19 pandemic. In 2021, the management of fiscal policies remained the single most important economic challenge confronted by the Palestinian Authority (PA). Against this fiscal backdrop, the banking system has remained relatively stable largely due to sound financial regulations, which confirms the importance of safeguarding the banking system against economic shocks. The size of the deficit is expected to remain large in 2022, reaching 5.1 percent of GDP (before aid). There is also scope to further enhance revenue generation. These proposed reforms, while necessary and urgent, are not sufficient to allow the economy to reach its potential if the policy context under which the Palestinian economy operates does not improve significantly. The PA’s fiscal situation needs to be placed on a more sustainable path, as this will eventually result in a better and more efficient allocation of resources, positively affecting social conditions which have worsened due to the pandemic. Understanding where the most prevalent vulnerabilities lie, and how different groups are impacted by the pandemic, helps to identify how to build more resilient lives and livelihoods for Palestinians. The main body of the report is organized in two chapters and one supporting annex.
World Bank, IFC, MIGA
Economic Monitoring Report to the Ad Hoc Liaison Committee
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MNA External Affairs (ECRMN)
Official version of document (may contain signatures, etc)
World Bank IFC MIGA
Economic Monitoring Report to the Ad Hoc Liaison Committee (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099446105042228837/IDU05e8be37b05ca3049ec0b5f80fecf27b07e6d