RAMALLAH _ Palestine News Network
The Palestinian Monetary Authority (PMA) said that the year 2017 saw a state of economic slowdown in reference to earlier forecasts.
According to a report issued by the Monetary Authority, the news agency "Sawa " A copy of it, registered a growth of 3.1% compared to 4.7% in 2016, bringing real GDP (at 2015 prices) to about 13.7 billion dollars, against the backdrop of the contraction of the Gaza economy despite the acceleration achieved in the West Bank.
The report included four main chapters, covering, respectively, local and global economic developments; Government financial developments; external sector developments, including the balance of payments and the foreign merchandise trade registered; and, finally, developments in the Palestinian financial sector, including the authority Cash, banks operating in Palestine, non-bank financial institutions.
Azzam al-Shawa, governor of the Monetary Authority, noted that the issuance of the report comes at a time when there have been many economic and political developments, international, regional and local, one of the results of which at the local level slowed the pace of growth during the year 2017, coupled with a slight increase in the current deficit of finance The Government and the current account deficit is declining in the balance of payments.
The global situation also saw a series of events that overshadowed the performance of the major economies, with the world economy registering as the best in almost seven years against the backdrop of global trade, backed by the recovery of investment in developed countries, and strong growth in emerging countries in Asia and Europe.
OPEC´s continued cut in oil production has led to a rebound in oil prices and a gradual improvement in many exporting countries.
Regionally, conflicts and political unrest continue in the Middle East and North Africa region, adding to this year new tensions in Gulf relations. The economic situation in the region has seen a disparity between countries, some of which have accelerated in others.
As a result, growth has slowed to its lowest level since the global financial crisis that occurred 10 years ago.
Returning to the local situation, after two consecutive years of acceleration, the Gaza economy slid back into the contraction cycle, declining by about 0.3% compared to 7.7% growth in 2016. In the West Bank, its economy accelerated in 2017, reaching a growth rate of 4.3% compared to 3.0% in 2016. On the other hand, consumer prices in Palestine grew slightly by about 0.2%, compared to a price contraction of about 0.2% in 2016, in the light of rising global commodity prices and the return of prices in Israel to growth.
In contrast, high levels of unemployment continue to be one of the main challenges for the Palestinian economy, especially in the Gaza Strip. Unemployment rates in Palestine have risen to 27.7% of the total workforce, compared to 26.9% in 2016. This came against the backdrop of high unemployment rates in the Gaza Strip from 25.9% in 2016 to 43.9% in 2017, despite its decline in the West Bank from 18.2% in 2016 to 17.9% in 2017.
In the area of public finance, the report pointed to a marked improvement in tax revenues, and a simple one in revenue-clearing, as opposed to the decline of both non-tax revenues, grants and foreign aid, which resulted in a decline in public revenues and grants during this year by about 5% Compared to 2016, to reach about 15,982.5 million shekels. Actual public spending declined by 1.1% compared to 2016, reaching about 14,601.8 million shekels.
As a result, these developments resulted in a surplus of 1,189.1 million shekels in total after support, compared with a surplus of 1,684.3 million shekels during the same period, with grants and external assistance contributing to the conversion of total deficits into surplus.
However, the Government´s arrears during the year rose by 2.8 percent from 2016. Government public debt (denominated in US dollars) rose by around 2.4% by the end of 2016, to about 2,543.1 million (about 8,849.7 million shekels), or about 17.5% of nominal GDP.
On the other side, the current account in the balance of payments for the year 2017 registered a deficit of 1,563.7 million, an improvement of 19.5% compared to 2016. This deficit was about 10.8% of GDP compared to 14.5% in 2016.
Mr. Al-governor said that despite the difficult conditions and political conditions in Palestine, the year 2017 witnessed more achievements in the Palestinian banking system, where the monetary Authority continued its efforts to develop the regulatory and legal framework governing the institutions of the system. Banking, and support it with different regulatory regimes.
It has also continued to strengthen its Arab, regional and international relations, with a view to deepening the links between the Palestinian banking system and its regional and international environment, and to prevent risks to the Palestinian banking system in the light of current circumstances. The efforts of the great Monetary Authority to promote financial inclusion in Palestine and to record many achievements in this field, economic and financial research and specialized reports in the economic, banking and financial fields have also continued. The outcome of these actions was positively reflected in the financial indicators of the Palestinian banking system, which improved liquidity levels, in conjunction with high inventories, growth of customer deposits, high credit facility portfolio and improved quality with a decline in the rate of faltering, and increased the capacity of this device to Meet expected and unforeseen risks.
In the banking sector, the report noted an increase of 11.6% in total banking assets at the end of 2017, reaching 15,850.2 million. The direct credit facility portfolio also saw an increase of 16.8%, reaching about 8,026.0 million dollars. This refers to the further operationalization of the financial intermediation role between surplus and deficit units in the economy, the provision of more financing opportunities and the contribution to the economic development process. Total deposits (banking and non-banking) increased by 11.7%, to 13,117.8 million, and net property rights increased by 12.4%, to 1,891.2 million dollars.
As for the future prospects for the performance of the Palestinian economy, the monetary authority´s forecasts of the performance of the Palestinian economy during 2018 indicate a continued slowdown in the economy, as real economic growth (according to the baseline scenario) is expected to slow to about 2.4% compared to 3.1% per year 2017. This performance comes against the backdrop of the assumption that the political and economic situation in Palestine remains the same in 2017, in terms of restrictions on crossings and free movement of people and goods, as Palestinian employment in Israel continues to increase at the same rate as in the previous year, and the reconstruction process continues The Gaza Strip at the same pace. In addition, the Palestinian Government continues to pursue a policy of fiscal rationalization, with the rates of growth of government revenues and expenditures remaining unchanged at the same levels of the previous year, and the continued decline in the flow of support by donor countries to the government treasury.
It should be noted that the "annual report" of the Monetary authority is issued regularly by the Department of Research and Monetary policy, and is a basic reference for research institutions, economic stakeholders and postgraduate students in Palestine, for its in-depth analysis based on the latest and most accurate data available.
