QEM Recent Issues

Economic Monitor 65 - First Quarter

year: 2021
  • GDP: During Q1 2021, GDP grew by 1.9% compared with the previous quarter, reaching USD 3,607.5m (at 2015 fixed prices). This is attributed to a rise of 1.7% in the West Bank and 2.8% in the Gaza Strip. This also reflected on the GDP per capita in Palestine which rose by 1.2% (1.1% in the West Bank and 2.1% in the Gaza Strip), reaching USD 7,37.9 (USD 1,060.4 in the West Bank compared with USD 303.9 in the Gaza Strip).

 

  • Labour and Unemployment: The unemployment rate in Palestine increased by 4.4 percentage points between Q1 2021 and Q4 2020, reaching 27.8% (17.1% in the West Bank and 47.9% in the Strip). The average daily wage in Palestine was NIS 135.8; NIS 124.9 in the West Bank, NIS 60.6 in the Gaza Strip, and USD 263.8 in Israel and its colonies. About 29% of private-sector waged workers earn the official monthly minimum wage level, which equals NIS 733 on average.

 

  • Public Finance: During Q1 2021, net public revenues and grants decreased by 7%, reaching around NIS 3.4bn compared with NIS 3.7bn in the corresponding quarter. On the other hand, public expenditures (on commitment basis) rose by 11% during the same period to NIS 3.9bn. In Q1 2021, government arrears totaled NIS 1.7bn with public debt rising by 15%, compared with the corresponding quarter, to reach NIS 11.8bn.

 

  • Banking Sector: During Q1 2021, credit facilities increased by 1% compared with the previous quarter to reach USD 10.1bn, 21% of which were granted to the public sector. On the other hand, total deposits rose slightly, reaching USD 16.5bn. Banks’ net profits reached USD 55.3m during the quarter, doubling compared with the previous quarter.

 

  • PEX: By the end of Q1 2021, the market value of shares traded at PEX was USD 3.5bn, almost maintaining the same level in the previous quarter. Al Quds index closed at 466.2 points, a drop of 1% compared with the previous quarter.

 

  • Inflation and Prices: During Q1 2021, the Palestinian economy witnessed negative inflation (drop in prices) of 0.26% compared with the previous quarter, i.e., the purchasing power of the shekel improved by 0.26% compared with the previous quarter. By contrast, the purchasing power for those who receive and spend salaries in USD declined by 1.63%, due to a drop in the USD exchange rate against the shekel. Given that the JD is pegged to the USD at a fixed exchange rate, the purchasing power of the JD witnessed approximately the same developments as the USD.
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