IMF Staff Country Reports

This paper presents a report on West Bank and Gaza to the ad hoc liaison committee. This IMF report puts fiscal and structural reforms into a broader context. It discusses key elements of the Paris Protocol on Economic Relations and their implications for Palestinian growth and income convergence with Israel. It then outlines necessary and sufficient conditions for the customs and de facto currency union to work as intended, including contributions from the Palestinian Authority, Israel and the international community. The report also discusses labor market issues, outcomes, and policies for faster economic growth and job creation. The report recommends working with the Government of Israel (GoI) to facilitate the movement and access of goods and people and investment in Area C. It also recommends addressing the fiscal crisis by formulating detailed fiscal reform policies to reduce the public sector wage bill, net lending, and health spending and, with the GoI, resolving the outstanding fiscal files.