The Palestinian economy remains “worrying” as growth stagnation, delays in aid delivery, and Israeli restrictions continue to seriously impede improvements to the Palestinian financial situation, a World Bank report revealed on Thursday.
According to the report, which will be presented to the Ad Hoc Liaison committee (AHLC) this coming Monday, despite efforts by the Palestinian Authority (PA) to consolidate its fiscal situation and reduce its deficit, it will face a financial shortfall of $600 million for 2016.
The World Bank estimated that the Palestinian economy would only grow by 3.5 percent in the medium term, adding that “per capita income growth has almost stagnated and projected growth levels will not support an improvement in living standards” in the occupied Palestinian territory.
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As a result of the economy being unable to keep up with its population’s needs, the World Bank said the Palestinian “stubborn” unemployment rate reached 27 percent, with an 18 percent unemployment rate in the occupied West Bank and 42 percent in the besieged Gaza Strip.
“The Palestinian economic outlook is worrying with serious consequences on income, opportunity, and well-being. Not only will it affect the Palestinian Authority’s capacity to deliver services to its citizens, it may also lead to wider economic problems and instability,” Marina Wes, the World Bank director for the West Bank and Gaza, stated in the report.
The World Bank pointed at Israeli policies as being “the main constraint to Palestinian economic competitiveness,” noting that restrictions in the West Bank and the Gaza Strip accounted for a third to a half of GDP lost growth.
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“Israeli restrictions…have pushed private investment levels to among the lowest in the world (in the Palestinian territory),” the report noted.
It added, “GDP losses in Gaza since the blockade of 2007 are above 50 percent.”
“Until there is a permanent peace agreement, the Palestinian economy will continue to perform below its potential and this will impact the economic and fiscal performance.”