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QEM Recent Issues

Economic Monitor No.54, November 2018

author: The Palestine Capital Market Authority , Palestinian Monetary Authority, Palestinian Central Bureau of Statistics, Palestine Economic Policy Research Institute - MAS
year: 2018

Q2 2018 in Brief:

• GDP: GDP declined during Q2 2018 by 0.8% compared with the previous quarter (at 2015 constant prices), which is attributed to a drop in the West Bank of 0.1% and a drop in the Gaza Strip of 2.8%. This led to a decline in per capita GDP by about 0.7% in the West Bank and by 0.75% in the Gaza Strip.

• Employment and Unemployment: The unemployment rate in Palestine rose by two percentage points in Q2 2018 compared with the previous quarter, reaching 32.4% (19.1% in the West Bank and 53.7% in the Gaza Strip). The percentage of private sector waged workers who earn sub-minimum wages was 33% (40.7% females and 31.3% males).

• Public Finance: In Q2 2018, public expenditures amounted to NIS 3.4 billion. External funding for budget support reached NIS 482.1 million (49% came from Arab countries). The government’s arrears amounted to NIS 578.6 million. The public deficit dropped by 3.3% compared with the previous quarter, reaching USD 2.4 billion.

• Inflation and Prices: During Q2 2018, the inflation rate in Palestine was 0.26% compared with the previous quarter. This implies a decrease in the purchasing power of those who receive and spend their income in shekels. The purchasing power of those who receive their salaries in dollars and dinars and spend in shekels increased by 2.97% and 2.93%, respectively.

• Banks: During Q2 2018, credit facilities rose by about 1% compared to Q1 of the same year, reaching around USD 8.3 billion, 16% of which were granted to the public sector. On the other hand, non-bank deposits stood at about USD 12 billion.

• PEX: The market value of shares listed on PEX reached USD 3.78 billion, a rise of 4% compared with the corresponding quarter. Al-Quds Index closed at 540.67 points, a level close to that recorded at the end of Q2 2017.

• Vehicle Registration: The number of new and second-hand vehicles (registered for the first time) in the West Bank reached 6,978 in Q2 2018, 79% of which were second-hand vehicles imported from international markets and Israel.

• Balance of Payments: During Q2 2018, the deficit in the Palestinian balance of payments reached USD 373.3 million. This is attributed to a deficit in the trade balance (USD 1.4 billion), against a surplus in the balance of income (USD 603.7 million) and a surplus in the balance of transfers (USD 450.2 million).

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