The Palestinian economy accelerated its performance by 3.2%.
Yearbook 2017
unemployment rate and poverty ratios and increase in exports. It also assumes that obstacles placed by Israeli Occupation on the movement of people and goods inside Palestine, between regions, or with neighboring countries reduced compared with 2017, plus natural population growth in Palestine.
Based on this optimistic scenario, real GDP is expected to grow by about 7 percent in 2018 and the GDP per capita will increase by 4 percent. According to this scenario, final consumption is expected to grow by 4.9 percent and investment is expected to increase by 16.2 percent. It is also expected that trade balance deficit will grow by 5.8 percent due to a 6.8 percent increase in imports and despite a 8.8 percent growth in exports. As for unemployment, it is expected to drop to 26 percent of total labor force during the same year. While the value government revenues is expected to increase by 18 percent and current account deficit is expected to decrease by 32 percent during 2018.
In the event of a negative shock (pessimistic scenario) this scenario accounts for the deterioration in the already volatile political and economic situation due to the external negative effects of the reconciliation. It assumes a drop in aid from donor countries to finance the budget of the State of Palestine (Central Government), an increase in tax evasion, fluctuations or stopping in the transfer of clearance revenues, a decline in revenues of the domestic value added tax, it also presumes a decline of income tax revenues and in customs and excise tax, it assumes that Israeli Occupation restrictions on the mobility of people and goods inside Palestine, between regions, or with neighboring countries will increase and the number of workers in Israel will decrease as the result of closures.
In this scenario, real GDP is expected to drop by 2.1 percent and the GDP per capita will decrease by 4.8 percent. According to this scenario, final consumption is expected to drop by 0.1 percent and investment is expected to decrease by 14.9 percent. It is also expected that trade balance deficit will drop by 2.9 percent due to a 2.9 percent decrease in imports and a 3 percent decrease in exports. As for unemployment, it is expected to grow significantly to 30.9 percent while the value government revenues is expected to decrease by 4.9 percent and current account deficit is expected to increase by 47.1 percent during 2018.
Palestine Capital Market developments:
The Palestine Capital Market Authority (PCMA) key achievements on the various sectors they regulate are followed:
• Reviewed the mechanism of dealing with issued unlisted securities and prepared an initial draft of instructions for selling subscription rights at PEX.
• Formed the supervisory team for the national assessment of Anti Money Laundering.
• Adopted minimum information to be provided in the account opening forms complying with KYC and anti money laundering instruction.
• Certified 3 new companies raising the number of leasing companies to 14.
• Continued their cooperation with the ministry of transportation and lands authority to accelerate the issuance of needed instructions pertaining to financial leasing.
• Applied the risk-based supervision approach and accordingly restructured the operations of the inspection in the insurance sector complying with the IAIS best practice.
• Adopted a group of standards to certify new insurance companies.
• Concluded the national financial inclusion strategy along with its executive plan for the period 2018-2025, which was led jointly with Palestine Monetary Authority (PMA) and approved by the cabinet.
PEX key developments during the year 2017 were:
• The agreement with Nasdaq to purchase the next generation of trading platform "X-Stream".
• The understanding with European Bank for reconstruction and development to prepare a gap analysis study on the securities sector.
• Enhancing the market depth via targeting family businesses and listing a new company "SANAD" which added USD 160 m to market cap.
• The restructuring and automation of PEX procedures which streamlined PEX daily operations and downsized its workforce.
• The continued efforts in investor education via quality workshops and seminars.
• PEX app for mobiles and other smart devices working on Android and IOS.
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