World Bank says Palestinian economy shrinking by 8% in 2020

The Palestinian economy is expected to contract by about 8% in 2020 as it copes with the effects of the coronavirus pandemic, an already struggling economy and a political standoff with Israel, the World Bank says in a report.

The report shows how the pandemic has accelerated the trends of sluggish growth and high unemployment plaguing the Palestinian economy in recent years. After clashing with the Trump administration, which cut off hundreds of millions of dollars in aid, the Palestinians are hopeful that improved ties with the incoming Biden administration will help give a lift to the economy.

In its report, the World Bank says the economy contracted by 3.4% in the first quarter of the year, before the pandemic arrived, compared to the same period in 2019. Things only worsened after the internationally backed Palestinian Authority imposed a two-month lockdown in the West Bank in March.

In Gaza, whose economy has been battered by an Israeli-Egyptian blockade since terror group Hamas seized power in 2007, authorities are also struggling with a coronavirus outbreak that began in August.

The bank forecasts a contraction of about 8% for the overall Palestinian economy, with the poverty rate at 27.5%. While those figures do not include breakdowns between the two areas, the report says unemployment in the West Bank is at 18.2% and 48.5% in hard-hit Gaza.

— Agencies