The International Monetary Fund (IMF) has urged that Israel lift its restrictions on the Palestinian economy and occupied territories to give way for improving investment opportunities.
“Amid a deteriorating security, political and social situation, the recovery [of the Palestinian economy] is losing momentum and per capita income is projected to decline over the medium term,” a report titled The outlook for the Palestinian economy remains dire, with risks tilted to the downside, issued at the end of last week warned.
The report stated: “The fiscal crisis remains unresolved, amid limited prospects for much-needed deep expenditure reforms and resolution of the outstanding fiscal files with Israel.”
According to the report, growth rebounded in 2021 after the pandemic but halved to 3.9 per cent in 2022 and is expected to decline further to 3 per cent in 2023.
It explained that the key factors contributing to the difficulties in the West Bank and the Gaza Strip were Israel’s withholding of tax revenues: “As well as the persistently lacklustre support from the international community.”
Meanwhile, the report stressed: “Achieving higher economic growth requires coordinated efforts from the PA, Israel and the international community.”
“Boosting economic growth and improving Palestinian employment and real incomes hinges critically on the easing of Israeli-imposed restrictions on movement, access and investment – including in Area C – and opening up of Gaza.”
The report cited that the Palestinian banking sector has largely escaped the economic crisis: “The banking sector remains generally stable amid early signs of asset quality deterioration.”