West Bank and Gaza: Selected Issues
IMF Staff Country Reports, September 13, 2023
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- Published: September 13, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400253843.002
Economic divergence and key outcomes
- In 2022, per capita income in Gaza was only a quarter of that in the West Bank.
- Gaza exhibits much higher unemployment and poverty rates relative to the West Bank.
- Years of isolation and continuous conflicts have left Gaza’s economic development far behind that of the West Bank.
- Gaza’s capital stock is stagnant and infrastructure is derelict, especially electricity, as a result of the Gaza blockade and repeated wars with Israel since 2008.
- Prospects for declining donor aid risk worsening Gaza’s humanitarian crisis.
- Under current conditions, Gaza is unlikely to meet the U.N. 2030 Sustainable Development Goals.
Drivers of divergence
- Much lower employment and investment rates in Gaza compared with the West Bank.
- Considerably lower productivity growth in Gaza.
- Israeli-imposed restrictions on access and movement of labor and goods severely hinder trade outcomes and productive capacity in both West Bank and Gaza, with restrictions far more severe for Gaza.
Analytical findings and sectoral focus
- Analytical work suggests sizeable economic gains from boosting Gaza’s electricity infrastructure.
- The deterioration of infrastructure, particularly in electricity, constrains productive capacity and investment returns.
Policy implications and recommended measures
- A major easing of the blockade and financing constraints is necessary to improve Gaza’s economic prospects.
- Any easing of restrictions should be accompanied by credible assurances that the security situation can be maintained in parallel.
- Continued or declining donor aid would exacerbate the humanitarian crisis, implying a need to secure sustained donor financing alongside reforms and infrastructure investments.
Source: West Bank and Gaza: Selected Issues — https://www.imf.org/en/publications/cr/issues/2023/09/12/west-bank-and-gaza-selected-issues-539154
Content in this bundle
- West Bank and Gaza: Selected Issues; September 11, 2023