Palestinians wearing face masks, amid the Covid-19 coronavirus pandemic walk in Rafah in the southern Gaza Strip, on October 1, 2020. Photo by Abed Rahim Khatib

World Bank: Palestine 2020 GDP expected to contract by about 8% 

PNN/ New York

After a successful containment of COVID-19 in the spring, the second wave returned by July.

The World Bank’s Palestinian Territories’ economic update report for October 2020 said that the economic activity suffered during the lockdown in the second quarter and is expected only to stabilize in the second half if the current conditions prevail. The fiscal position has worsened not only due to the outbreak but also due to a political standoff that is disrupting the flow of revenues. The outlook remains precarious and subject to numerous political, security and health risks.

“Following three consecutive years of economic growth below 2%, 2020 is proving to be an exceptionally difficult year as the Palestinian economy faces triple reinforcing crises: i) resurgent COVID-19 outbreak, ii) a severe economic slowdown, and iii) another political standoff between the Palestinian Authority (PA) and Government of Israel (GoI), disrupting clearance revenues,” the report said.

“A difficult year is already assured even with no further escalation of public health measures,” it said. “While some measures to curb the movements and gatherings are still in place, the great majority of activity remains open. Assuming that the lockdowns remain limited, the severe first half contraction will likely avoid repetition, though not sufficiently to offset the losses in the first half. Consequently, GDP for 2020 is expected to contract by about 8%. A modest bounce back is expected in the forecast period with growth averaging 2.5% as full normalization of activity is not expected to occur before the second half of 2021. The poverty rate is projected to stall around 27.5% in 2021.”