UN report: Palestinian economy performs "well below potential"
While there were signs of improvement in the occupied Palestinian territory´s GDP in 2009, driven largely by donors´ support and some easing of closure policy in the West Bank, these need to be interpreted cautiously in view of the wider context, warns a new UNCTAD report.
The Palestinian economy continued to perform "well below potential", according to UNCTAD´s 2010 report on assistance to the Palestinian people. The economy remained held back by a weakened tradable goods sector, a lack of exchange rate policy tools, the Israeli closure policy and continued erosion of the productive base.
Recent economic growth should be viewed with caution, as there are concerns over its sustainability, expanding trade deficit, deepening aid dependence, and worsening welfare divergence and fragmentation of the West Bank, Gaza and East Jerusalem.
Drawing on the findings of UNCTAD´s analytical work, the report estimates the indirect economic cost of the blockade of Gaza and the West Bank closures at somewhere between $600-and-$800 million per year (13% of GDP), with employment loss ranging from 60,000-to-80,000 jobs per year (10% of total annual employment).