World Bank warns of decline in economic growth in Palestine

The World Bank yesterday warned that economic growth in the occupied Palestinian territories would “soften” in 2023 due to the continued Israeli restrictions on mobility, access and trade.

In a report, World Bank Country Director for West Bank and Gaza, Stefan Emblad, said: “Exogenous sources of risks, such as in the areas of food and energy prices, mean the overall economic outlook remains bleak.”

The report hailed the Palestinian Authority’s efforts to bring about reforms including reducing the public sector wage bill, but warned that the Israeli restrictions and dependence on foreign donors negatively affect economies in the West Bank and Gaza Strip.

Emblad stressed that raising living standards, improving the sustainability of fiscal accounts and reducing unemployment in a meaningful manner will all require significantly higher growth rates.

He noted that the Palestinian Authority (PA) must continue to advance priority reforms, in order to increase revenues, improve debt management, and enhance the sustainability of public finances.

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Emblad called on donors and the Israeli government to cooperate with the Palestinian Authority “to achieve fiscal consolidation and put the economy on a more solid footing.”

The report cited a previous World Bank report which noted that restrictions in the West Bank and the blockade imposed on Gaza remain among the most important obstacles to stability, growth and private sector development in the Palestinian territories.

“If not eased or lifted, the Palestinian economy is expected to continue operating well below its potential,” it said.