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Palestinian economy witnesses the worst economic scenario at the end of 2020

The Palestinian economy witnesses the impact of the worst economic scenario at the end of 2020 year, in light of an economic contraction after a stormy year in Jerusalem, the West Bank and the Gaza Strip.

The condition of deterioration continues in light of the dramatic events that the Palestinian economy lived from the Corona pandemic, the clearance crisis, the continued siege on the Gaza Strip, and the bad conditions on the Jerusalem economy.

It should be noted that the World Bank’s report stated that the Palestinian economy is contracting during the current year by 8%, which threatens bad impacts.

Need a Recovery Plan

The Director General of Planning and Policies at the Ministry of Economy, Dr. Osama Nofal, stated that this is the first time that there has been a contraction of 8% since 2002 – which witnessed a contraction of 12% due to the Al-Aqsa Intifada.

Nawfal talks to SAFA about expectations that the contraction will rise more than 15% during the next few months, if a serious recovery plan is not pursued, and that the losses of the Palestinian economy exceed 2.5 billion shekels due to this contraction.

He said: “It is expected that there will be an improvement during the year 2021 with the return of the activity cycle to the usual path after the current state of recession,” adding: “The improvement of the Palestinian economy remains dependent on the extent of the global economic recovery with the creation of a vaccine for the Corona virus and the resumption of the injection of foreign aid and grants to the Palestinian budget, as well as a greater solution to the imposed blockade on the Gaza Strip and to allow raw materials to enter the Strip simultaneously with allowing products to be exported abroad.

Meanwhile, the academic at An-Najah University, Abdel Fattah Abu Shukr, does not expect that there will be a rapid recovery of the Palestinian economy at the beginning of next year due to the continuing Corona crisis.

He also confirms that the consequences of the Corona pandemic and the clearance crisis, such as a rise in poverty and unemployment rates, represent great challenges for the government to solve the economic crisis.

The World Bank said in a report on the Palestinian economy: “After three consecutive years of economic growth of less than 2%, the year 2020 has proven to be a very difficult year, and the Palestinian economy is facing three crises, each of which is severe: the outbreak of the Corona pandemic, a sharp economic slowdown, and the clearing crisis that ended recently and left bad impacts on the banking sector and employees.

The report reviewed that the Palestinian economy contracted by 4.9% in the second quarter of this year (compared to the previous quarter), and 3.9% on an annual basis (compared to the same quarter in 2019).

The World Bank expects the return of positive growth during 2021 at a slow pace of 2.3%, and at a similar rate in 2022.

The report stated that about 121,000 people lost their jobs in the second quarter of this year only due to the outbreak of the pandemic, “96,000 of them were in the Palestinian economy itself, especially in the tourism and construction sectors, and 25,000 were working in the Israeli economy.”

Source: Safa

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