A sharp decline in GDP in the Gaza Strip by 8% while the GDP in the West Bank increased by 2.3% during the first three quarters of 2018 compared to parallel quarters of 2017.
Palestine
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The preliminary estimates indicated a slowdown in GDP growth in Palestine in 2018 to reach 0.7% compared to 3% in 2017, GDP per capita has decreased by 1.5%, where the first three quarters of the year 2018 witnessed a decrease in GDP for Gaza Strip by 8% compared to the same quarter of 2017, on the other hand the GDP in the West Bank rose by 2.3% during the same period.
The industry activities recorded the highest increase in value added compared to 2017, the preliminary estimates showed an increase by 5%, which rose by 6% in the number of employed persons, followed by the agriculture activity with a gross value added rising by 4%, and construction activity by 0.7%, whereas services and other branches declined by 1% compared with 2017.
An increase in the number of employees in the labor market during 2018
Preliminary estimates indicated an increase in the total number of employed persons in the labor market by 2% compared to 2017. The increase was attributed to the high increase in the number of employed persons in construction and industry activities. Unemployment rate increased to 31% in 2018 compared to 29% in 2017.
A decline in the Palestinian trade balance deficit during 2018.
Preliminary estimates of the Palestinian foreign trade movements which are represented in the value of exports and imports, indicated that the value of exports increased by 8% compared to 2017 and the value of imports increased by 2% compared to 2017, which led to a decrease in the trade balance deficit by 1% compared to the previous year.
Preliminary estimates showed that the average of overall consumer prices index in Palestine recorded a slight decrease during 2018 compared with 2017.
Palestine Economy 2017
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Economic Outlook 2018
The performance of the Palestinian economy continues to fluctuate due to the political and economic circumstances and challenges. Uncertainty and political stalemate continue to prevail as the negotiations process is stagnant. The challenges also included reliance by the Palestinian economy on foreign aid and grants which continue to dwindle, a multi-currency financial system affected by the monetary policies of countries issuing these currencies and by global prices of commodities, especially oil and food.
Despite the difficulties the Palestinian economy faced in 2017, it succeeded in accelerating its performance by 3.2 percent thanks to the construction and industrial sectors. This improvement was accompanied by a slight increase 0.25 percent in consumer prices. On another side, unemployment rates increased and reached 28.5 percent as the labor market failed to create sufficient new job opportunities to accommodate the new labor joining the market. Both exports & imports increased by 4.2 percent & 2.8 percent respectively.
Palestine Economic Forecasts for 2019
Those forecasts were developed based on various scenarios for Palestine, which do not differentiate the West Bank from Gaza Strip despite the gap between them, and in consultation with the Advisory Committee for Economic Statistics, which consists of local economists and academics, in addition to the Ministry of Finance and Planning and the Palestinian Monetary Authority. Each scenario took into consideration internal political and economic circumstances for 2019, the blockade imposed upon Gaza Strip, foreign aid, Israeli measures in Palestine, the number of Palestinian workers in Israel and economic and social variables.
Baseline Scenario
This scenario is based on the assumption that the economic and political situation in Palestine will remain the same as it was during 2018, as well as the decline in financial support provided by donor countries to finance the budget of the State of Palestine (Central Government). Decline in clearance revenues from Israel, in addition to an increase of government transfers and income tax collection and increased the value of the credit facilities. It assumes that obstacles placed by Israel on the movement of people and goods inside Palestine, between regions, or with neighboring countries, will be the same as in 2018, in addition to the natural population growth in Palestine.
Expectations of Base Scenario
Real Sector:
Gross Domestic Product (GDP): It is expected to increase by 0.5% in 2019; the value of GDP per capita is expected to decrease by 2%, and the value of gross consumption (private and public) is also expected to decrease by 1%. The value of total investment is expected to increase by 5%.
Work and Workers: An increase of 3% in the number of employees is anticipated and the unemployment rate is expected to reach 31.5% in 2019.