Economic Outline

flag Palestine Palestine: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to adress the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The territories under the administration of the Palestinian Authority have been suffering the adverse effects of the regional conflict and the global economic shock prompted by the pandemic, which led to a GDP contraction of 11.3% in 2020. Nevertheless, data from the Palestinian Monetary Authority (PMA) show that, after growing 7% in 2021, the Palestinian economy managed to achieve a growth rate of approximately 3.6% in 2022 despite the significant reduction in external support, the continued deductions of tax revenues decided by Israel and the repercussions from the Russian invasion of Ukraine. In 2022, there was an increase in the value-added across most economic activities: the industry sector had the highest growth rate, with a 6.3% increase, followed by services which grew by 2.9%. The construction activity also increased by 2.3%. On the other hand, the agricultural activity experienced a decline of 2.6%. Increasing concerns about the continued rise in prices, which ultimately led to a decline in real income and purchasing power of individuals, are expected to weigh on growth, which is projected at 2.5% in 2023 (PMA).

Palestine is still bound by the Protocol of Paris signed with Israel in 1994, which gave Israel full control over Palestine's trade and tax revenues for a 5-year period under the assumption such funds would be handed over to the Palestinian National Authority and the agreement would be amended; neither has occurred thus far. The Palestinian Authority's (PA) budgetary freedom of action remains extremely limited. Customs duties are collected by Israel on behalf of the PA before being remitted to the government and it is the primary source of revenue. Coface expects budget performance to remain poor, due to low external aid from Gulf countries, lower EU contribution and high public spending. However, the fiscal deficit contracted to 0.4% of GDP in the first half of 2022 and was projected at 3.5% for the year as a whole by the IMF (from 5.2% one year earlier), thanks to large increases in revenues, well above nominal GDP growth, and restrained recurrent spending (including social transfers). According to the latest data available from the IMF, government debt (including arrears to suppliers and the Palestinian Pension Agency) increased from 34.5% of GDP in 2019 to 48.4% at the end of 2021 and was expected to remain stable last year. Meanwhile, inflationary pressures and global price increases were gradually reflected in the level of domestic prices, especially since Palestine imports most of its consumption of goods and services from abroad, which caused a rise in the general level of prices throughout 2022, with the inflation rate reaching about 3.8% (the highest rate in nearly ten years). For 2023, the PMA forecasts inflation of around 2.2% amid a decline in food prices and low levels of domestic demand in light of the slowdown of economic growth.

The humanitarian situation has worsened in recent years, particularly in Gaza where nearly 80% of residents depend on some form of aid. Estimates based on GDP per capita growth, the World Bank suggests that in 2021 the poverty rate stood at around 27.3%, an increase of nearly 6 percentage points from 2016 (latest available official data). In 2022, the labour market continued to recover as the total number of employees increased by 7.6% compared to 2021. This increase in the number of employees, along with the relative improvement in the level of economic activity, contributed to a reduction in the unemployment rate to 25.7% in 2022, compared to 27.6% one year earlier. Unemployment, which has risen steadily in recent years, disproportionately affects residents of Gaza. According to 2023 estimates by the IMF, Palestine's GDP per capita (PPP) was estimated at USD 6,688.


Monetary Indicators 20162017201820192020
Israelian Shekel (ILS) - Average Annual Exchange Rate For 1 MUR

Source: World Bank - Latest available data.


Main Sectors of Industry

Agricultural activities contribute roughly more than 5% of GDP and involve 1.854 million acres (31% of the total West Bank and Gaza Strip area), and informally employs 90% of the population (CEPR; Fanack). Restrictions such as limited access to Area C (where 62.9% of agricultural land is located) enforced by Israel, construction of the Separation Wall, confiscation of land to build settlements, and restrictions on their exports

Industry contributes about 13.1% of GDP, only behind the services sector. Products include extraction of marble, phosphates, asphalt, mud, and glass sand; handicrafts such as textiles, footwear, ceramics, pottery, olive wood, seashells, coloured glass, soap, leather tanning, embroidery, and bamboo products; and food processing.

The services sector accounts for roughly 63.1% of GDP and employs about 62% of the population (Fanack). Services include real estate activities, banking, telecommunications, insurance, transportation, distribution, hotels, and restaurants.

Breakdown of Economic Activity By Sector Agriculture Industry Services

Source: World Bank - Latest available data.


The Active Population in Figures

Labour Force 1,214,0111,275,9691,266,283

Source: International Labour Organization, ILOSTAT database

Men activity rate 72.93%71.96%72.81%
Women activity rate 18.35%18.34%19.15%

Source: International Labour Organization, ILOSTAT database


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Country Risk

See the country risk analysis provided by Coface.


Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

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Sources of General Economic Information

Useful Resources
Ministry of Finance (Palestinian National Authority) - Arabic
Council of Ministers
Palestine Monetary Authority

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Latest Update: December 2023