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Palestinian economy in dire straits, GDP fell by 11.5% in 2020

New World Bank report – COVID-19 effects continue to severely hurt the Palestinian economy, which is already faltering, resulting in a contraction in gross domestic product by 11.5 percent in 2020, one of the worst declines recorded. Under the economic crisis, under-supply in the health system and Certainty about the vaccine system, the report calls for coordination between the Palestinian Authority and Israel and the world in order to eradicate the epidemic and enable necessary health services.

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The World Bank’s new economic monitoring report will be presented to the Ad hoc Liaison Committee (AHLC) during a policy meeting to develop assistance to the Palestinian people (virtual meeting) to be held on February 23, 2021. Article link

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The report highlights critical challenges facing the Palestinian economy and describes the Article link

The impact of COVID-19 on the health sector and the policy measures adopted so far.

Even before the corona crisis began, the outlook for the Palestinian economy was bleak with low growth levels, persistent financial deficits, high unemployment rates and rising poverty. Article link

The situation worsened with the combined effects of the epidemic and the cessation of the transfer of tax money that Israel collects for the PA, which led to one of the sharp contractions in economic activity.

According to the report, the Palestinian economy is in a very difficult situation due to the global health and economic crisis, after suffering from 3 closure periods in March, July and November 2020, severe economic slowdown, and a political crisis with Israel that delayed the tax transfer for Israel for six months. -November 2020).

As a result, Palestinian GDP in 2020 is expected to fall by about 11.5%. Article link

The unemployment rate in the Palestinian territories reached 28.5% at the end of the third quarter of 2020, which includes an unemployment rate of about 49% in the Gaza Strip and an unemployment rate of about 19% in the West Bank. Article link

The poverty rate rose to about 30 percent, with about 1.4 million Palestinians living below the poverty line. Article link

The combined impact of the epidemic, a tax cut and a 20 percent drop in international aid led to a budget gap, after the aid received, of over $ 1 billion For years.

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The corona plague and its effects have exacerbated the situation of the Palestinian economy, which was difficult and worrying even earlier. As the epidemic grows longer, the fragile welfare and health systems are placed under even greater pressure to cope with the crisis. , Said Kenneth Shenkar, Regional Director of the World Bank in the West Bank and Gaza.

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The Palestinian Authority plans to vaccinate 20% of its residents with vaccines provided to it free of charge under the international COVAX program, backed by the World Health Organization. Article link

The Palestinian Ministry of Health plans to purchase additional vaccines to vaccinate 60% of the population, at a total cost of about $ 55 million, of which there is a gap of $ 30 million. To date, the authority has received less than 20,000 vaccine doses. While Israel leads the world in terms of vaccines per capita, the Israeli Ministry of Health has not formulated an allocation strategy to support the territories, beyond the 5,000 vaccines that have been transferred to vaccinate health care workers.

Among the report’s recommendations is to improve coordination between the PA and Israel to eradicate the epidemic and manage the vaccine system, and reduce the challenges of border control to enable the purchase of life-saving medical equipment. This coordination is critical while the PA formulates its vaccination deployment plans. Emergency Public Health Center to centralize data management and informed decision-making processes that will serve as an effective coordination body with all partners. Due to a significant loss in revenue, donors can help eradicate health challenges through increased investments to help with the epidemic while ensuring the continuity of vital health services and the introduction of vaccines.

Situation – Article link

The Palestinian economy and health system in the shadow of the Corona

* 49% unemployment rate in Gaza

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The poverty rate among Palestinians has risen to about 30%

* Aid from donating countries to the Palestinian Authority dropped by 25%

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The infection rate in the PA is 21%, along with one of the lowest tests in the area.

As the corona plague has worsened in both the West Bank and Gaza, it has exposed existing weaknesses in the Palestinian health system and economy, which are affected by protracted conflict, limited budgets, segregated management and challenging services. Article link

The rate of tests in the territories is one of the lowest in the region and the infection rate of over 21% indicates an uncontrolled spread of the epidemic, according to the guidelines of the World Health Organization.

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The cumulative count of corona patients in the PA was 163,573 on January 7, 2021, of which 119,904 in the West Bank and about 44,279 in the Gaza Strip. Article link

The percentage of corona tests among Palestinians is one of the lowest in the region, and the percentage of positive tests – over 21 percent – indicates an uncontrolled spread of the disease. Since June there has been a steady increase in new cases of corona patients and the daily average of new cases reached in January 2021 about 995 new patients a day. Part of this increase is due to the movement of Palestinian workers between Israel and the Palestinian territories. There is still a shortage of protective equipment, laboratory equipment and other equipment for critical medical needs.

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The epidemic has severely disrupted the provision of services to other vital health services, such as maternal and child health, or non-communicable diseases. Article link

The suspension of coordination with Israel has significantly disrupted the accessibility of life-saving treatments in Israel, which are lacking in the Palestinian territories.

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The Palestinian health sector faces significant and ongoing challenges. During the Corona epidemic, improved coordination between the West Bank and Gaza, as well as between the Palestinian Authority and Israel, will benefit the general public in the fight against Corona and ensure the stability of essential health services. “, Shenkar added.

According to data from the World Bank, a modest recovery is expected in 2021 in the form of a growth of about 3.5 percent, which partly reflects mixed expectations regarding the scope and success of corona vaccines in the population. Article link

The Palestinian Authority’s budget assistance for 2020 from donor countries was about $ 488 million, a decrease of 20% compared to 2019 and the lowest in decades. Although the closures in the second half were partial and Israel renewed the transfer of taxes to the Authority, there is a deficit of about $ 1.1 billion in 2020, which forces the Authority to dilute the financial reserves and start 2021 in a difficult economic situation

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