2018年-世界发展银行全球_Economic_Monitoring_Report_to_the_Ad_Hoc_Liaison_Committee_46页_1mb

Economic Monitoring Report Summary

Core Content

This report provides an analysis of the economic situation in the Palestinian territories, focusing on the West Bank and Gaza, with an emphasis on the challenges and opportunities for sustainable growth. It outlines the current economic performance, public finance status, and the role of the financial sector, while also highlighting the need for reform and cooperation to address the structural and external constraints that have hindered economic development.

Main Points

Economic Growth

• Overall Growth: In 2017, the Palestinian territories experienced a real GDP growth of 2.4 percent, driven by the West Bank, while Gaza's growth was only 0.5 percent.
• Challenges: The economy has long been constrained by movement, access, and trade restrictions, which have limited investment and eroded the productive base.
• Aid Dependency: Growth has been largely fueled by aid, which is not sustainable. The report warns that aid cannot substitute for a poor business environment.
• Future Outlook: The 2018 growth forecast is 2.5 percent, but this is expected to be a decline in per capita terms. The economic outlook is fragile with significant downside risks, including potential donor cuts and increased tensions.

Public Finance

• Fiscal Performance in 2017: The PA's fiscal deficit was 7.7 percent of GDP, down from 8 percent in 2016, due to increased domestic revenues and reduced expenditures.
• Revenue Growth: Domestic taxes increased by 15 percent year-on-year, with income tax, customs, and excise on tobacco showing strong growth. This was partly due to improved tax administration and the establishment of a new local tobacco company.
• Expenditure Reduction: Public expenditure fell by 2.5 percent in 2017, primarily due to wage bill reductions and cuts in net lending, especially in Gaza.
• Financing Gap: Despite improvements, the PA's financing gap remained around USD420 million in 2017, filled by domestic bank credit and arrears. The 2018 financing gap is projected at USD440 million, but potential reconciliation with Hamas could increase it to USD1 billion.
• Fiscal Consolidation: The PA has achieved significant fiscal consolidation over the last decade, reducing the fiscal deficit from 30 percent of GDP in 2006 to 8 percent in 2017, despite the internal divide.

Financial Sector

• Stability: The financial sector remained relatively stable in 2017 but is subject to several risks.
• Key Risks: Increased delinquent loans and bounced checks in Gaza, potential cuts to UNRWA funding, and the risk of disruption in Correspondent Banking Relationships (CBRs) with Israeli banks.
• Need for Monitoring: The sector requires close monitoring to prevent destabilizing factors from affecting economic growth and the financial system.

Key Information

Gaza's Economic Decline

• Critical Juncture: Gaza's economy is at a critical juncture due to liquidity issues, reduced aid, and internal and external restrictions.
• Structural Decline: Over the past two decades, Gaza has undergone deindustrialization, with the manufacturing and agriculture sectors shrinking from 27 percent of GDP in 1994 to 13 percent today.
• Income and Employment: Real per capita income has fallen by a third since 1994. Unemployment in Gaza reached 44 percent in 2017, while the labor force participation rate is low.
• Humanitarian Impact: A liquidity squeeze has affected around 80,000 families, reducing their spending and economic activity.

Path to Recovery

• Private Sector Role: The report emphasizes the need for a private sector-driven growth model, which requires removing internal and external constraints.
• Infrastructure Needs: Improving water and electricity supply is essential for economic recovery, but these investments must be supported by expanded trade opportunities.
• Policy Recommendations: The PA and GoI are urged to unify business regulations, improve access to finance for SMEs, and create an enabling environment for the service sector.

Role of the International Community

• Support and Reforms: Donor support and innovative financing mechanisms are critical for sustaining economic growth. The World Bank is establishing a Private Sector Enhancement Facility (PSEF) to support private sector development.
• Civil Service Integration: This is identified as a key priority to improve governance and institutional legitimacy in Gaza.

Actions and Responsibilities

Conclusion

The report underscores the urgent need for a comprehensive and coordinated approach to economic recovery in the Palestinian territories, with a focus on Gaza. It calls for the removal of both internal and external restrictions, the strengthening of governance and institutional capacity, and the support of the private sector through improved access to finance and a conducive business environment. Continued donor support is also essential to sustain growth and prevent further economic and social deterioration.