In a recent publication, the World Bank reported that the Palestinian economy has seen a reduction of around 500,000 jobs since last October, with approximately 200,000 job losses in the Gaza Strip, 144,000 in the West Bank, and 148,000 workers transitioning from the West Bank to the Israeli labor market.
The World Bank anticipates a contraction of 6.5% to 9.6% in the Palestinian economy in 2024, attributing it to the ongoing effects of the conflict between Israel and Hamas that commenced on October 7, 2023.
Regarding poverty levels among Palestinians, the report indicated a 32.8% poverty rate in mid-2023, revealing significant disparities between the West Bank and Gaza Strip, where the rates stood at approximately 12% and 64%, respectively. This reflects a 3.7% increase compared to the 2017 analysis of poverty conditions in the Palestinian territories.
The report highlighted that nearly all Gaza residents are currently living in poverty. The per capita GDP experienced a 12% annual decline in 2023, amounting to $3,360. In the Gaza Strip alone, there was a 28% decrease, with the per capita income in Gaza constituting about one-fifth of that in the West Bank. The report also mentioned that the real per capita income in the Gaza Strip in 2023 reached its lowest point.
The World Bank’s report stated that the Palestinian Authority’s financial situation has significantly deteriorated over the past three months, greatly heightening the risk of public finance collapse. Decreased revenue streams, resulting from a sharp decline in transfers of clearing revenues payable to the Palestinian Authority and a substantial reduction in economic activity, have led to a significant disparity between revenues and expenditures, contributing to a public finance crisis.
Notably, by the end of 2023, the Palestinian Authority’s financing gap, a pressing issue that requires immediate attention, totaled $682 million. It is projected to double to $1.2 billion in the upcoming months. The report identified the increase in foreign aid and the accumulation of arrears owed to public employees and suppliers as the only available financing alternatives for the Palestinian Authority.
