The Performance Of The Palestinian Economy During 2021, As Well As The Economic Forecasts For The Year 2022

H.E. Dr. Awad, President of PCBS, demonstrates the following:

• The performance of the Palestinian economy during 2021.

• The economic forecasts for the year 2022.

H.E. Dr. Ola Awad, President of PCBS, demonstrated today Wednesday, 29/12/2021, the performance of the Palestinian economy during 2021, as well as the economic forecasts for the year 2022, as follows:

The performance of the Palestinian Economy[1]during 2021

The Palestinian economy began to gradually recover in light of the breaking of the epidemic curve of the COVID – 19 pandemic, while it is still below its pre-pandemic level despite the almost complete cessation of external support.

The Palestinian economy began to recover gradually in light of the breaking of the epidemiological curve of the COVID – 19 pandemic and despite the almost complete cessation of external support.

The Palestinian economy recorded an increase of 6.7% during the year 2021 while remaining below its pre-pandemic level. During the year 2021, economic activities witnessed an increase in value added, which, in return, led to an increase in the GDP per capita by 4.1%, and thus increasing the level of public demand for the indicators of gross consumption and investment.

The year 2021 witnessed an increase in Gross Domestic Product (GDP) of 6.7% compared to 2020, where the first quarter of 2021 witnessed a decline in GDP by 6% compared to the same period of 2020. As and as a result of easing the severity of the measures resulting from the pandemic, the second quarter of 2021 recorded a remarkable increase of 19%. Such increase will continue during the third quarter of 2021 of 7% compared to the corresponding quarter of the year 2020, despite the sharp decline in the foreign aid provided to the State of Palestine to support the budget, as well as the recent Israeli aggression on the Gaza Strip, which lasted for more than 10 consecutive days, and the continued intransigence of the Israeli occupation with deducting part of the clearance revenues under false pretexts such as the debts of the Israeli Electricity Company. Also, at the level of spending, the total consumption in Palestine increased during the same year by 6%, and the gross investment increased by 11%.

The increase in the value added of most economic activities as a result of mitigating the measures resulting from the pandemic.

Most economic activities witnessed an increase in the value added during the year 2021 compared to the year 2020. The construction activity recorded the highest growth value added by 8%, and the industry activity grew by 7%, followed the services activity, which increased by 4% during 2021, while the agricultural activity witnessed a decrease of 3%.

A rise in the trade balance deficit, an increase in the volume of trade exchange with the outside world, and a rise in imports and exports to and from Palestine.

In terms of the foreign trade movement in Palestine, which is represented in total exports and imports, initial estimates indicated an increase in the value of exports by 14% compared to 2020. Also, the value of imports increased by 9% during the same period, despite the increase in exports at a higher rate than the increase in imports, and as a result of the value of imports is three times the value of exports, this led to a rise in the trade balance deficit by 7% compared to the previous year.

A stability in the unemployment rate during 2021.

The total number of employees in the labor market increased from 886 thousand employees in 2020 to 925 thousand in 2021. Also, the unemployment rate reached 27.8%.

Regional gap in unemployment rates

The total number of employees in Palestine increased from 886 thousand employees in 2020 to 925 thousand employees in 2021. Thus, the unemployment rate reached 27.8%. Data during the first three quarters of 2021 indicate that there is a gap in unemployment rates on regional levels. Consequently, it reached about 17% in the West Bank and about 51% in Gaza Strip. Unemployment rates among graduates exceed 35%, as the Palestinian labor market needs to direct education towards technical and vocational education to meet the needs of the Palestinian labor market and not concentrate it in non-employment-generating sectors. Still there is an insufficient number of employees for rare specialties in the Palestinian market, such as maintenance technicians for medical devices, ATM maintenance technicians, car’s software maintenance technicians, neurosurgeons, and vascular surgeons. On the other hand, there is a large percentage of academic disciplines graduates. In addition to the high disparity in workers’ wages in the State of Palestine and those how work in Israeli and Israeli settlements, which, in return, led to a shortage in the number of employees in the local Palestinian market.

Increase of Palestine’s public debt by 4%.

Public debt reached USD 3.8 billion by the end of the third quarter of 2021 with an increase of 4% compared to the fourth quarter of 2020, where the public debt was USD 3.6 billion.

An increase of consumer Prices[2] during the year 2021

According to preliminary estimates, and because of the increase of the prices of raw materials and shipping, the average of overall consumer prices index in Palestine recorded an increase of 1.2% during 2021 compared with 2020.

Source: Palestine Central Bureau of Statistics