World Bank: Palestinian Economy facing severe crisis

PNN/ Bethlehem/

The World Bank said the Palestinian economy is now facing a “severe fiscal shock” due to the tax revenues issue with Israel, calling for a speedy resolution.

The report, prepared by the World Bank, was published Wednesday and is due to be presented to the The Ad Hoc Liaison Committee (AHLC) at its next meeting in Brussels on April 30.

“The economy, which has not experienced real growth in 2018, is now facing a severe fiscal shock due to the Israeli cuts in tax revenues” said Anna Bjerde, the Acting Country Director for West Bank and Gaza, stressing the necessity to find an urgent solution to prevent further deterioration of economic activity and living standards.

Bjerde added that tax revenues is a major source of public budget income, and all segments of the population are experiencing the effects of this crisis.

The report highlights the major challenges faced by the Palestinian economy, focusing on the effects of restrictions on the entry of dual-use goods, which are essential for production and modern technology, and calls on Israel to reconsider its application of the system.

The report said that the Palestinian economy has witnessed low growth rates that are unable to cope with population growth, leading to increased unemployment and deteriorating living conditions.

The absence of growth in the last 12 months is due to the severe deterioration of the situation in the Gaza Strip, where more than half of the population Of unemployment, and economic activity contracted by 7% in 2018, the most severe recession in the sector is not a result of conflict, but growth in the West Bank has also slowed below recent levels.