UN report: Palestinian economy - worst performing in the region

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The Palestinian economy continued to perform badly in 2007, according to a new report published by URWA. Real Gross Domestic Product (GDP) in 2007 – estimated at about USD 4.1 billion – was virtually unchanged from 2006, the report has indicated.

There was a rebound in the public sector after mid-2007 due to the end of the fiscal crisis that began in 2006 with the Government of Israel (GOI) and donor boycott of the Palestinian Authority (PA) and public employee strike. But this was offset by continued stagnation in the private sector. GDP in 2007 remained around 8.3 percent below its 1999 level. With population growth of about one-third during the intervening period, per capita GDP in 2007 was almost a third below its 1999 level.

The occupied Palestinian territory (oPt) continued to have the worst performing
economy in the Middle East North Africa sub-region (MENA).

The real average unemployment rate in the oPt in 2007 remained amongst the highest in the world at 29.5 percent. When adjusted to account for the sharp increase in unpaid absentee workers in Gaza during the second half of the year, joblessness in Gaza between July and December 2007 reached an unprecedented high of 45.3 percent. At 46.1 percent, rates were slightly higher for refugees in Gaza Strip.

In the West Bank, unemployment for the year remained unchanged at 24.5 percent, around double the MENA average, with higher rates for refugees (26.8 percent). Labour force growth continued to outpace population growth and rates rose in the second half of the year.

At the household level, consumption poverty fell in the West Bank from 24 percent in 2006 to 19.1 percent in 2007, likely driven down by the lifting of the international embargo on the PA at mid-year.

In Gaza Strip, where restrictions on access were tightened following Hamas’ takeover in June, the number of households below the consumption poverty line continued to grow, reaching 51.8 percent for the year as a whole, despite significant amounts of emergency and humanitarian assistance.