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Economic Monitoring Report to the Ad Hoc Liaison Committee (English)

The Palestinian economy has started its recovery in 2021 as COVID-related (coronavirus) measures have been eased, but sustainable sources of growth going forward remain limited. Given the decline in the daily number of new COVID-19 cases, lockdowns have been significantly eased in 2021. This combined with the pickup of the vaccination campaign allowed consumer confidence to slowly pick up and business activity to gradually rebound. The economy is estimated to have grown by 5.4 percent, in real terms, in the first half (H1) of 2021, year-on-year. The improved economic performance was fully driven by the West Bank economy while Gaza’s economy remained almost stagnant in H1 2021 due to the 11-day conflict in May. Growth is expected to further pick up throughout the remainder of the year and reach 6 percent in 2021 as the West Bank economy continues to regain more of what was lost during 2020 and with the implementation of some Israeli confidence building measures supporting economic activity and facilitating reconstruction in Gaza. In the following years, growth is expected to hover around 3 percent as the low base effect weakens and as sources of growth remain limited given the ongoing restrictions on movement, access and trade. Unemployment remained stubbornly high in 2021, mainly driven by Gaza. The unemployment rate in the Palestinian territories reached 26.4 percent in the second quarter of 2021: 16.9 percent in the West Bank and 44.7 percent in Gaza, reflecting the particularly difficult economic situation in the Strip due to the effect of the 11-day conflict and the ongoing restrictions. The extremely high unemployment rate in Gaza comes hand-in-hand with deteriorating social conditions in the Strip. Estimates by the World Bank indicate that the recent conflict has pushed poverty in Gaza to 59.3 percent in 2021 (using 5.50 US Dollars a day (2011 PPP) international poverty line). This is 2.3 percentage points higher than the COVID-19 induced peak in 2020, and a 16.3 percentage point increase above the 2016-2017 values (latest available official data).


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  • Country

    West Bank and Gaza,

  • Region

    Middle East and North Africa,

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  • Doc Name

    Economic Monitoring Report to the Ad Hoc Liaison Committee

  • Keywords

    non performing loan; small and medium size enterprise; small and medium enterprise; electricity distribution company; real gross domestic product; labor force participation rate; prudential regulation and supervision; pay taxes; real per capita income; transmission and distribution network; banking system; continuous energy supply; budget support; Public Spending; domestic public debt; average daily wage; growth and development; high unemployment rate; international poverty line; service and infrastructure; movement of good; water and wastewater; sustainable development strategy; high youth unemployment; fees and charge; financial sector risk; demand for electricity; cost of energy; restrictions on export; signs of recovery; living in poverty; movement of people; million people; labor market opportunities; banking system asset; foreign exchange inflow; labor productivity growth; electronic bill presentment; investment and development; factor of production; inputs to production; requests for proposal; repeated economic shock; return on asset; private sector activity; private sector supplier; segments of society; public pension system; share of labor; cause for concern; national payment system; types of service; institutional capacity building; funding gap; banking sector; correspondent banking; recent years; Wage Bill; Energy Sector; cross-border payment; wastewater service; domestic bank; loan portfolio; capital stock; vaccination campaign; net lending; telecoms law; agriculture sector; transfer system; direct credit; Public Services; modern economy; civil administration; dual-use good; public revenue; social assistance; consumer price; real gdp; regulatory forbearance; Payments for Services; social impact; human capital; Job Creation; digital economy; modern world; regional market; advance payment; gross loans; fiscal performance; fiscal forecast; several years; digital infrastructure; recent signature; public finance; social condition; power supply; new company; downside risk; energy crisis; product safety; severely limits; external market; medical supply; license payment; raw tobacco; tobacco package; logistics service; integrate trade; temporary suspension; work permit; additional expense; duty station; high spending; private investment; transportation network; direct loan; Indirect Exposure; global trade; regional divergence; economic distress; private activity; household expenditure; donor assistance; employee account; promissory note; short period; indirect channel; solvent enterprise; construction material; business permit; domestic tax; bank exposure; used cars; building relationship; electricity network; energy shortage; unmet demand; Power Generation; tobacco smuggling; tax enforcement; tax authority; tax authorities; registered business; international standard; health situation; fiscal imbalance; vulnerable household; utility operator; Basic Education; deposit ratio; export capacity; tax base; credit exposure; audit activity; approval process; management capacity; economic sector; time trend; untargeted transfer; health referral; application procedure; procurement practice; payment arrears; Land Registration; nontax revenue; local bank; trade procedures; external support; property right; Donor countries; safe road; domestic borrowing; domestic debt; Exchange Rates; social contribution; modern technology; processing time; reduce trade; donor community; consumer service; foreign trade; consumer loan; private lending; road transportation; institutional measure; poverty indicator; terrorism concern; internal displacement; business sector; basic infrastructure; power equipment; monthly revenue; international community; available data; external restrictions; outstanding portfolio; regulatory arrangement; diesel supply; retail trade; lending service; israeli shekel; rural transportation infrastructure; Learning and Innovation Credit; housing shortage; transport logistic; small economy; housing need; employment prospect



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Economic Monitoring Report to the Ad Hoc Liaison Committee (English). Washington, D.C. : World Bank Group.