Slow steps for Palestinian economic recovery, says World Bank

GAZA CITY: Palestine’s economy is showing “signs of recovery” but still faces serious challenges including “very high unemployment and deteriorating social conditions” in Gaza, the World Bank said on Tuesday.

In the first half of 2021, growth reached 5.4 per cent, and is expected to reach 6 per cent this year, the World Bank said in a report. However, growth in 2022 is predicted to slow to around 3 per cent, it added.

“The way ahead is still uncertain,” said Kanthan Shankar, World Bank Country Director for the West Bank and Gaza, adding that progress “depends on coordinated actions by all parties in revitalising the economy and providing job opportunities for the young population”.

The Gaza Strip was hit hard during 11-days of devastating conflict with Israel in May, while the economy was also impacted by restrictions imposed to stem the spread of coronavirus.

In Gaza, a Palestinian enclave of two million people controlled by Hamas, unemployment stands at 45 per cent, while the poverty rate has risen to 59 per cent from 43 per cent five years ago.

“The dire living conditions and the high dependency on social assistance of the people of Gaza is of particular concern,” Shankar said.

In the occupied West Bank, the unemployment rate is around 17 per cent, the World Bank calculates, saying the “Palestinian Authority’s fiscal situation remains very challenging” and warning it was “no longer able to borrow from domestic banks”.

The PA’s deficit is expected to reach $1.36 billion in 2021, it added.

The World Bank called on donors “to help reduce the budget deficit”, and for the “systematic transfer” of revenues Israel raises from businesses operating in the so-called Area C of the West Bank, where Israel holds full control under the 1995 Oslo Accords.

“Releasing some of these funds would provide much needed quick financing in these difficult times,” it added.

Meanwhile, the Gaza Strip’s sole power plant was preparing to cease operations due to a severe shortage of fuel supplies in the Palestinian enclave.

The Palestinian Energy Authority said on Saturday that supply of diesel fuel has not been delivered since last Tuesday.

Enough fuel was able to be obtained locally only to keep the plant running through Sunday morning.

Aid organisations say the roughly 2 million people in the coastal territory live in very poor conditions – a major problem being frequent power outages. – Agencies