ANKARA – The Palestinian economy is growing but prospects remain uncertain because of worsening conditions in Gaza, the World Bank said Tuesday.
“The Palestinian economy is showing signs of recovery largely due to improved activity in the West Bank,” Anadolu Agency citing the bank’s Economic Monitoring Report that will be presented Nov 17 in Oslo, Norway to the Ad Hoc Liaison Committee said.
“However, Gaza still suffers from a particularly difficult economic situation with very high unemployment and deteriorating social conditions. In the current economic context, the outlook is uncertain as sustainable sources of growth remain limited,” it added.
The bank said business activity has gradually rebounded, resulting from a decline in new coronavirus cases, progress in vaccinations and easing lockdowns.
While the improvement in the economy was fully driven by the West Bank, Gaza’s economy remained almost stagnant, affected by the 11-day armed conflict in May with Israel, it added.
The Palestinian economy grew 5.4 per cent in the first half of 2021 and is expected to expand six per cent overall for the year. But growth in 2022 is expected to slow to around three per cent as sources of growth remain limited, it noted.
“The economy still suffers from restrictions on movement, access, and trade– the biggest impediment to investment and access to markets,” said World Bank Country Director for West Bank and Gaza, Kanthan Shankar.
“It also lacks growth drivers for sustained positive impacts on the economy and quality of life. The way ahead is still uncertain and depends on coordinated actions by all parties in revitalising the economy and providing job opportunities for the young population,” he said.
Gaza’s contribution to the overall Palestinian economy was cut by half in the last three decades, narrowing to just 18 per cent today, said the report, while noting that Gaza has also undergone deindustrialisation and its economy has become highly dependent on external transfers.
The unemployment rate climbed to 45 per cent and poverty reached 59 per cent in Gaza as a result of the 11-day conflict and worsening COVID-19 conditions, it said. The enclave suffers from poor electricity and water-sewerage availability, conflict-related psychological trauma and limited movement.
Israel launched new attacks on the Gaza Strip in May, killing nearly 300 people, including women and children, leaving a trail of destruction. Health facilities, media offices, as well as schools, were among structures targeted.
Since 2006, the Gaza Strip has groaned under a crippling Israeli blockade that has deprived its roughly two million inhabitants of vital commodities, including food, fuel and medicine.
