RAMALLAH, Despite a limited recovery in the Palestinian economy in 2022, the tendency toward a slowdown continued and is forecasted to continue in 2023, today said the Palestine Monetary Authority (PMA) and the Palestinian Central Bureau of Statistics (PCBS) in their jointly issued press release on the performance of the Palestinian economy for 2022 along with the economic forecasts for 2023.
During the year 2022, the Palestinian economy succeeded in achieving a growth of about 3.6%, compared to a growth of 7.0% during the year 2021, despite the many complex crises it suffered from, and despite the almost complete cessation of external support provided to the State of Palestine to support the budget, the continuation of the Israeli deductions of tax revenues (clearance) throughout the year, and the repercussions of the Ukrainian- Russian crisis, driven by the improvement in the level of aggregate demand, whereas the level of gross consumption increased by 7.0%, and gross investment increased by 15.3%, said the PMA and PCBS.
Most economic activities witnessed an increase in the value-added during 2022. The industry activity recorded the highest growth rate of 6.3%, as the services activities grew by 2.9%, followed by the construction activity, which increased by 2.3%, while the agricultural activity witnessed a decrease of 2.6%.
The year 2022 also witnessed a continued recovery in the labor market, as the total number of employees increased by 7.6% compared to 2021. Despite the increase in the number of employees; hence, the relative improvement in the level of economic activity contributed to reducing the unemployment rate during the year 2022 to 25.7% compared to 27.6% in 2021.
In terms of the foreign trade movement for Palestine, the preliminary estimates indicated an increase in the value of exports by 7.3% compared to an increase in the value of imports by 16.9%, which led to a rise in the trade balance deficit by 21.7% compared to the previous year.
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, and the inflation rate in Palestine reached about 3.8% compared to the previous year. This is the highest rate in nearly 10 years.
The Palestine Monetary Authority and the Palestinian Central Bureau of Statistics also forecasted the main indicators of the Palestinian economy for 2023, based on a group of factors and assumptions, which were included in the baseline scenario, where its impact is expected to be reflected on the most important indicators in various sectors (the real sector, the financial sector, and the external sector), especially in light of the continuing wave of global inflation, the tightening of monetary conditions, and the exacerbation of problems related to supply chains, specifically primary and basic commodities, as a result of the continuation of the Ukrainian- Russian war.
The results of these forecasts indicate the continued slowdown in the performance of the Palestinian economy for the second year in a row, driven by the increase of the uncertainty resulting from the government’s financial situation, the noticeable rise in domestic price levels, and the decline in the purchasing power of per capita income.
Based on these assumptions, forecasts indicate the possibility of the Palestinian economy achieving a growth rate of about 2.5% during the year 2023, compared to estimated growth of about 3.6% during the year 2022, driven by the growth of consumption and investment and exports expenditure, and the improvement in the value added of most economic activities.
This performance is expected to be accompanied by a slight decrease in unemployment rates, to 25.5% compared to 25.7% in 2022, with the per capita income level remaining unchanged.
Source: Palestine News & Info Agency