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Palestinian authority

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Summary

The West Bank - the larger of the two areas comprising the Palestinian territories - experienced a high single-digit economic growth rate in 2010 as a result of inflows of donor aid, the Palestinian Authority's (PA) implementation of economic and security reforms, and the easing of some movement and access restrictions by the Israeli Government. Nevertheless, overall standard-of-living measures remain near levels seen prior to the start of the second intifada in 2000. The almost decade-long downturn largely has been a result of Israeli closure policies - a steady increase in movement and access restrictions across the West Bank in response to Israeli security concerns which have disrupted labor and trade flows, industrial capacity, and basic commerce, both external and internal. Since 2008, the PA under President Mahmoud ABBAS and Prime Minister Salam FAYYAD has implemented a largely successful campaign of institutional reforms that has contributed to increased security and economic performance, supported by more than $3 billion in direct foreign donor assistance to the PA's budget since 2007. An easing of some Israeli restrictions on West Bank movement and access since 2008 also has contributed to an uptick in retail activity in larger cities. The biggest impediments to economic improvements in the West Bank remain Palestinians' lack of access to land and resources in Israeli-controlled areas, import and export restrictions, and a high-cost capital structure. Absent robust private sector growth, the PA will continue to rely heavily on donor aid for its budgetary needs.

According to the PA's Ministry of Finance, the government revenues increased during 2009, by 0.2% compared with 2008. The revenues earnings during 2009 were USD 1.7 billion. This coincided with the increased level of income for public expenditures, since public expenditure increased by 9.7% compared with 2008. The numbers concerning unemployment rate decreased in 2009 by 5.8% compared with 2008.

 

Table: Scenario Results for Main Economic Indicators at constant price in the Palestinian Territory – 2010

 

Indicator

2010

2009*

Baseline scenario

Optimistic scenario

Pessimistic scenario

Total Government Revenues (US$ M)

1,688.0

1,738.6

2,027.0

1,439.0

Total Government Expenditure

(US$ M)

2,673.0

2,814.6

2,828.0

2,275.0

Government Consumption (US$ M)

1,828.9

1,967.7

1,980.8

1,797.0

Population (in thousands)

3,702

3,807

3,807

3,807

Percentage of changes (CPI) (%)

2.8

3.0

3.0

3.0

GDP (US$ M)

5,147.2

5,363.6

5,602.1

4,837.9

GNI (US$ M)

5,584.9

5,803.4

6,072.7

5,266.0

GNDI (US$ M)

8,607.0

9,043.1

9,798.3

7,682.7

Private Consumption (US$ M)

4,416.8

4,484.8

4,787.1

4,022.6

Total Investment (US$ M)

1,393.5

1,453.7

1,483.8

1,354.6

Exports (US$ M)

829.9

858.2

904.6

774.1

Imports (US$ M)

3,369.7

3,448.8

3,602.2

3,110.7

GDP per Capita ($US)

1,390.3

1,408.8

1,471.5

1,270.8

GNI per Capita ($US)

1,508.5

1,524.4

1,595.1

1,383.2

GNDI per Capita ($US)

2,324.8

2,375.3

2,573.7

2,018.0

GDP Growth Rate (%)

6.8

4.2

8.8

- 6.0

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