(84) Economic Monitor - Special Issue
Time marched forward, yet the landscape of 2025 remained entirely unchanged from the bleak political, economic, and social landscape that prevailed in the previous year in the occupied Palestinian Territory. Although the final quarter of this year saw the announcement of a ceasefire, the human, economic, and material devastation inflicted on the Gaza Strip throughout the year exceeded the limits of documentation and assessment. In the West Bank, restrictions on movement between various governorates were further tightened, with hundreds of checkpoints and barriers erected and unbridled settlement expansion. Compounding this harsh situation was the ongoing severe financial crisis gripping the Palestinian government following the continued withholding of clearance tax revenues since the middle of the year. In light of these developments, the outlook points to further tightening of constraints on economic activity, deepening structural imbalances in the local economy, and a continued decline in incomes, alongside a widening gap between earnings and the cost of living.
The first section of this issue covers economic developments during the fourth quarter and throughout 2025. Annual data show that despite signs of a partial recovery in demand and production during 2025 compared with 2024, both remained below their levels registered in the pre-war period. This downturn was accompanied by an upsurge in unemployment and
inflation rates, reversing the relatively stable trajectories they had followed in previous years.
The second section of this issue addresses key economic and local developments in five boxes. The first box examines a study published in the quarterly peer-reviewed journal “Omran,” published by the Arab Centre for Research and Policy Studies, and titled “The Timeline, Components, and Governing Structure of Israel’s West Bank Settlement Project.” The box is organized into three main themes. The first theme offers a historical overview of the development of settlement activity in the West Bank. The second theme examines the components of the settlement project. The third addresses the bureaucratic structure of Israeli actors managing the settlement project.
The second box addresses rising women’s participation in the Palestinian labour market. It shows how female labour force participation rates in Palestine have displayed a gradual upward trend over recent decades. Nevertheless, despite this progress, it should be noted that women’s participation rates remain below both regional and global levels. The third box sums up the key findings of the roundtable discussion convened by MAS on the issue of economic and social rights in the Draft Interim Constitution of the State of Palestine.
The fourth box examines the impact of the depreciation of the US dollar on the Palestinian economy, alongside the impacts of the appreciation of the Shekel on the Israeli economy. It also tackles the growing threat resulting from the potential loss by the US dollar of its dominance as the premier international hard currency, and the implications of the rise of alternative currencies competing with the US dollar in international trade financing, global financial transactions, and the accumulation of reserves by central banks. Titled “The World Bank and the Board of Peace,” the fifth and final box sums up the main findings of the meeting between the World Bank (WB) representative and a host of Palestinian businessmen and academics. In his intervention, the WB representative presented on the role the WB has played and continues to play in financing development projects in Palestine, as well as the relationship between the WB and the Board of Peace (BoP).
In conclusion, MAS likes to extend gratitude to its three partners for their efforts in developing and supporting the Economic Monitor, as well as to the research team for their dedicated efforts. MAS would like to especially commend Dr Numan Kanafani for his substantial contributions to elevating the Economic Monitor’s stature, cementing its scholarly impact within the research and academic community.