The Portland Trust Palestinian Economic Bulletin
The Portland Trust publishes a monthly bulletin with the Palestinian Economic Policy Research Institute (MAS) on the Palestinian economy. The monthly bulletin covers the latest economic developments affecting the West Bank and Gaza Strip (WBGS) and includes key indicators such as unemployment figures, new business starts, consumer prices, and statistics indicating the vigour of banks operating in the WBGS. Long-term trends, such as demographic statistics or changes in public sector employment, are covered when relevant. The bulletin reports major events affecting the economic and business environment of the WBGS, such as mergers and acquisitions, bankruptcies, changes in business law, changes in company leadership, and political developments. The bulletin presents an analysis of the economic indicators and news, and focuses on their implications for business and for the Palestinian economy.
For past issues (2008/2006/2007), please click here
Issue 64 - January 2012 
Main reports: In the run up to the 2012 budget Prime Minister Dr Salam Fayyad has warned that the Palestinian Authority will need to raise taxes and cut costs to counter the ongoing fiscal crisis.
The latest trade figures
from PCBS show that Israel
remained the major trading
partner for the PA in 2010.
The Office of the Quartet
Representative (OQR) issued
a report on the aggregates
industry in the West Bank.
On 19 December the European Commission adopted the 2012 aid package for the Palestinian Territory, planning to spend €300m.
An UNRWA report on the
West Bank labour market
released in December
reveals that the private
sector accounted for more
than 90% of the growth in
employment in the West
Bank in the first half of 2011.
Issue 63 - December 2011
Main reports: A quarterly business survey
on business perceptions
has shown that owners/
managers are increasingly
pessimistic about the future:
only 26% expect to see
an improvement in their
situation in the next quarter.
There has been a sharp
decline in hotel guest
numbers in Q3, which
totalled around 106,000:
20% down on the previous
quarter and a 23% reduction
compared to the same
period in 2010.
1,717 building licenses were issued in Q3 2011: 15% fewer than in Q2 but 16% more than in the same quarter last year.
In November National Aluminium & Profile (NAPCO) became the 46th company to be listed on the Palestinian Stock Exchange.
Issue 62 - November 2011
Main reports: In October, the Palestinian
Authority initiated a free
trade agreement with
Mercosur, with a final signing due in December. In other trade news, exports in August increased by 17.7% compared with July, and imports were down by 0.1%.
The World Bank ranks the West Bank and Gaza 131 out of 183 economies in terms of regulations that affect domestic firms.
Mercy Corps, Google.org and the Source of Hope Foundation launch the Arab
Developer Network Initiative (ADNI) in the West Bank and Gaza, aimed at driving
innovation in the Palestinian ICT sector.
In October the Al-Quds Index decreased by 1.33%, reaching its lowest level of
474.7 points on the last day of trading (31 October). This is the lowest value the index
has had since 15 January 2009.
Issue 61 - October 2011
Main reports: The European Parliament
voted unanimously in favour
of a trade agreement with
the West Bank and Gaza. It
gives direct, duty-free and
mostly quota-free access
to the European market
for Palestinian agricultural
products, processed
agricultural products, fish
and fishery products.
PADICO Holding announced
the successful closure of the
first Palestinian corporate
bonds issuance with a $15m
surplus subscription over the
$70m offered.
Following difficulties earlier in the year, the PA paid the
entire August and September
salaries to its 150,000
employees.
PCBS released the results of
a new tourism survey. In 2010
the number of inbound and
domestic visitors reached
4.9m marking a major
increase of 88% compared
with 2009.
Issue 60 - September 2011
A special Bulletin to mark the fifth anniversary of publication, reviewing key developments and the economic performance of the Palestinian economy over the past five years.
Issue 59 - August 2011
Main reports: The EU has launched an Arabic language version of the Export Helpdesk. This free online service is provided by the European Commission and gives detailed information on exporting to the EU, including product-specific duties, import tariffs, trade statistics and links to business associations.
The French energy management company Schneider Electric is the first company to set up operations in the French-Palestinian Bethlehem Multidisciplinary Industrial Park (BMIP).
The latest business
perceptions survey for
Q2 2011 shows mixed
experiences among
Palestinian industrial owners
on economic performance.
The figures for Q2 2011
reveal that owners of active
businesses are on balancepositive about business
prospects.
PCBS released the results of the annual report on transportation and communications for 2010.
Issue 58 - July 2011
Main reports: The London Stock
Exchange hosted the
second Palestinian Capital
Markets Day in June. The CEO of the Palestine
Exchange led a delegation
of leading Palestinian
companies for meetings
with international investors. PADICO announced a Global
Depository Receipts issue at
the same time.
A new World Food
Programme report has
concluded that the easing
of restrictions on the
Gazan economy has had a
marginally positive effect but
failed to generate productive
and sustainable growth.
Palestinian GDP grew by
0.4% in Q1 2011. West Bank
GDP contracted by 4.9%,
whereas it grew by 17.9% in
Gaza.
The UK Government has announced an aid programme of up to £349m over the next four years, focusing on boosting the economy and helping the most vulnerable people.
Issue 57 - June 2011
Main reports: Dubai-based Rasmala Investment Bank launched the Palestine Equity Fund, with a $15m initial investment by the Palestine Investment Fund. The fund will make equity investments in the Palestinian Territory.
Unemployment fell in Gaza from 37.4% in Q4 2010 to 30.8% in Q1 2011. In the West
Bank it increased from 16.9% to 17.4%.
Figures out this month show that in 2010 49% of Palestinian households had a computer and 29% of households had an internet connection. More than 93% of households owned a mobile phone.
The European Commission announced a new financial package of €85m to pay the salaries and pensions of key workers, as well as supporting vulnerable Palestinian families.
Issue 56 - May 2011
Main reports: Housing conditions have improved since 2006 with a 21% increase in the number of residential buildings across the Palestinian Territory. Only 10% of households now live in units with three or more people per room and 15% live in units with only 1-2 rooms. This is down from 19% and 24%, respectively, in 2006.
PADICO launched the first Palestinian corporate bond
issue on 10 May. $70m of capital
will be raised. The bonds will
mature after five years with a
fixed interest rate of 5% for the first 30 months and a variable rate (linked to US Libor) within a 5 - 6.5% range for the remainder of the term.
The 2010 Poverty Survey found that poverty in the Palestinian Territory fell to 18% in the West
Bank (from 19% in 2009), and
remained unchanged, at 38%,
in the Gaza Strip.
The latest survey of Industrial
Establishments found that
the percentage of Palestinian
businesses expecting improved
performance in Q2 2011
was 40% higher than those
expecting a decline. Conversely,
in Q1 2011, 20% more
businessmen felt the general
performance of their enterprise
was worse than those that
noted an improvement.
Feature: Aid Dependency in the Palestinian Territory
Issue 55 - April 2011
Main reports: Total banking sector credit reached $2.94bn at the end of February 2011. This is equivalent to 43% of deposits. $2.09bn of credit is for the private sector.
Sadara Ventures was
launched on 5 April with $28.7m of capital. MEVC
is targeted at the ICT sector and is financed by a range of companies, individuals and institutions that include Cisco, the European Investment Bank, the Google Foundation and the Soros Economic Development Fund.
The 2011 Budget is now in effect and a projected increase in revenues means that 66% of the Palestinian Authority's recurrent spending can be financed from domestic sources. Total budget support required for 2011 is $1bn and the recurrent budget deficit is projected to fall to 13% of GDP, down from 16% in 2009.
Issue 54 - March 2011
Main reports: The Palestinian Development and Investment Company (PADICO) intends to issue $70m of commercial bonds in the coming weeks. These commercial bonds will be the first of their kind in the Palestinian Territory.
The Palestinian Ministry of Agriculture has launched a consultation process to decide how to address the issue of rising food prices. As a net importer the impact of high world food prices is felt acutely within the Palestinian Territory.
Hotel activity increased by 24% in Q4 2010 on account of the Christmas season and
relatively stable conditions. Work is underway to boost tourism in Bethlehem by the
development of an action plan for the area.
Unemployment fell in the
West Bank from 20.1% in Q3 to 16.9% in Q4 2010. In Gaza
unemployment also fell, from 40.5% to 37.4%.
Issue 53 - February 2011
Main reports: Massar International announced the initial closing of the Siraj Palestine Fund at $60m on 3 February. Siraj is the first private equity fund dedicated solely to companies operating in the Palestinian Territory.
Preliminary national accounts' estimates for Q3 2010, released by the Palestinian Central Bureau of Statistics, show that GDP was 0.6% lower compared to Q2 2010. The biggest decrease was seen in agriculture in the West Bank, reflecting seasonal
changes in the sector.
The Palestine Economic Policy Research Institute (MAS)
released the first Palestinian
country report for the Global Entrepreneurship Monitor on 22 January. It found the opportunities for entrepreneurship to be favourable in the Palestinian Territory compared to other MENA countries. However the 'fear of failure' prevents 42% of people from starting a business. Average required start-up capital for new enterprises is around
$10,000.
A package of $428m development projects for East Jerusalem was presented to the Arab Economic and Development Summit on 19 January. These projects form
part of the PA's new strategic plan for Jerusalem. A committee has been formed to study the proposals.
Issue 52 - January 2011
Main reports: The US has launched a new Palestinian Information Communications Technology Capacity Building Initiative (PITI) in partnership with large multinationals, including Cisco, Google, HP, Intel, Medcor and Salesforce.com.
On 22 December the EU
agreed to allow all Palestinian
agricultural products duty
free access to the European
market. This is in addition to
existing agreements, which
give Palestinian industrial
goods duty free access.
Over the Christmas period Bethlehem witnessed the highest number of visitors over the last ten years. There were 90,000 visitors and all hotels were fully booked.
Figures from the Palestinian Monetary Authority show that bank credit reached $2.85bn in 2010, an increase of over 30% since 2009. Loans were provided across several sectors with trade financing and construction receiving the greatest amount of credit.
Issue 51 - December 2010
Main reports: Unemployment in the Palestinian Territory rose
from 22.9% in Q2 2010
to 26.6% in Q3 2010. The
increase is attributed to
the influx of graduates
into the job market in July.
Unemployment in the West
Bank and Gaza was 20.1%
and 40.5% respectively.
The Palestinian Monetary Authority (PMA) plans to issue $50m of Islamic bonds in the first quarter of 2011. The bonds will provide the PMA with a new instrument to control liquidity in the Palestinian banking sector.
The Palestinian mobile operator, Wataniya, sold 15% of its share capital in an initial public offering (IPO). 38.7m shares were available at a price of $1.30 until 2 December.
Thousands of Palestinian
workers, trade
union members and
representatives from the
Palestinian Legislative
Council participated in a
strike against new tax laws
on 2 December.
Feature: The Private Sector in Gaza
Issue 50 - November 2010
Main reports: The results of the first Palestinian foreign investment survey were released on 13 October. Figures show that foreign investment in the Palestinian Territory reached $1.58bn in 2009. FDI totalled $1.15bn.
The Bank of Palestine and Green Palestine Company will launch a new loan facility for environmentally friendly projects at the end of November. Small loans of up to $10,000 will be available for Palestinian households that wish to undertake sustainable projects.
The International Finance Corporation (IFC) has signed an agreement to evaluate the impact of the Palestinian Monetary Authority’s Credit Bureau. The Bureau has had notable success in increasing credit and bank profit and reducing bad debts. The IFC will specifically look at the impact it has had on job creation.
Food prices increased by over 3% in September. This caused the highest monthly rise (1.39%) in inflation for over two years.
Issue 49 - October 2010
Main reports: Palestinian membership of the International Chamber of Commerce (ICC) was granted on 14 September. The subsequent establishment of a Palestinian-Israeli arbitration centre is hoped to improve the resolution of commercial disputes between Israeli and Palestinian businessmen.
The Ad Hoc Liaison Committee (AHLC) for assistance to the Palestinian Authority (PA) met in New York on 21 September. The PA was praised for its reform effort in 2010. Donors were asked to fill the fiscal gap for the remainder of 2010.
Private sector credit from the banking sector was $1.8bn at the end of July 2010, up from $1.5bn at the beginning of the year. The credit to deposit ratio was 42%, up from 34% at the beginning of the year.
A new 5 star Mövenpick hotel is due to open in Ramallah in October with 172 rooms. At the end of Q2 2010 the number of hotel guests to the Palestinian Territory was up 42% compared to the same period last year.
Issue 48 - September 2010
Main reports: Unemployment in the West Bank fell from 16.5% in Q1 2010 to 15.2% in Q2 2010 (according to the ILO definition). In Gaza, unemployment rose from 33.9% to 39.3% over the same period.
The private equity industry continues to develop. Abraaj has recently opened an office in Ramallah and appointed a fund manager. Siraj is currently reviewing the 25 investment proposals it received over the last three months.
On 4 August HSBC announced plans to expand its credit portfolio and range of banking services offered in the Palestinian Territory.
Preparations are underway for the launch of a Palestinian Employment Fund by the end of the year. An international fundraising conference is planned for November.
Issue 47 - August 2010
Main reports: The Multilateral Investment Guarantee Agency (MIGA) has appointed a local representative to raise awareness about its Investment Guarantee Trust Fund. Eligible investors can apply for risk insurance to cover projects in the Palestinian Territory of up to $10m.
The cornerstone of the new $400m Ersal Commercial Centre in Ramallah was laid on 22 July. The Ersal Centre will include offices, housing, entertainment facilities, shops and hotels.
An 18-month pilot project has been launched to support the development of the IT sector in Gaza. Firms can apply for financial assistance to support product development. Regional markets for export will also be identified.
The EU has announced a new financial aid package of €71m for the Palestinian Territory in 2010. This is in addition to the existing commitment of €158.5m.
Issue 46 - July 2010
Main reports: The Government of Israel has taken steps to ease the flow of goods into the Gaza Strip. Special arrangements have been established for the entry of construction materials.
The Palestinian Banking Corporation (PBC) has set up a $2.5m fund for agriculture, which could increase to $10m in the longer term. Loans of $10,000 - $100,000 will be available for agricultural engineers and farmers.
Zawya, a leading online source for investors, has agreed to publish data on the Palestinian market from the brokerage firm Sahem Trading and Investments Company. With over 70,000 subscribers Zawya will expose the Palestinian market to a greater number of investors.
The US Overseas Private Investment Corporation has approved $30m of financing for the Palestinian private equity fund Siraj. The fund is expected to launch later in 2010 and hopes to raise a total capital of $80m.
Feature: The Renewable Energy Sector in the Palestinian Territory
Issue 45 - June 2010
Main reports: Construction of the first electricity generating power station in the West Bank was announced at the Palestine Investment Conference. The Energy Authority has dedicated $300m to the Palestine Power Generating Company for the project.
A Palestinian-German team is working to establish a Palestinian Employment Agency modelled on employment services provided in other countries. The central agency will oversee a number of one-stop-shops for employment across the West Bank.
Arab Bank has closed two of its three branches in Gaza. The Palestinian Monetary Authority issued its largest ever fine, of JD 300,000, for lack of sufficient notification of the closures, but has been quick to reassure depositors that the banking sector in Gaza is stable.
Unemployment in the West Bank and Gaza fell during Q1 2010 to 16.5% and 33.9% respectively (according to the ILO definition). This is down from 18.1% and 39.3% in Q4 2009, and 17.8% and 42.3% in Q1 2009.
Issue 44 - May 2010
Main reports: Private sector credit from the banking sector was $1.56bn at the end of January 2010, up from $1.18bn at the end of December 2008. The loan to deposit ratio was 36%, up from 31% at the end of January 2009.
28 out of 36 companies reported profits in Q1 2010. The largest profits were recorded by PALTEL ($23.2m).
According to Paltrade there has been a 52% increase in the number of trucks leaving the West Bank with exports compared to last year. PCBS forecast that the value of exports will increase 3.4% this year.
Support for the PA budget has recently been provided by the UK ($25m), the EU (€21m), India ($10m), Qatar ($10m) and Algeria ($26m).
Issue 43 - April 2010
Main reports: In January 2010 medium term business confidence in the West Bank was higher than at any point in the previous year. 74% of businesses in the West Bank expected production to increase opposed to 4% who expected a decline.
A delegation of 32 Palestinian finance and business professionals took part in the first Palestine Securities’ Exchange (PSE) road show to London in March. Over 30 B2B meetings were held with major international investment funds.
The governments of Brazil and Argentina have agreed to negotiate a Free Trade Agreement (FTA) between Mercosur, the largest South American trading bloc, and the Palestinian Authority.
The cornerstone of the Bethlehem Multi Purpose Industrial Park (BMIP) was laid on 8 April. BMIP is a French-Palestinian initiative with €10m of funding from the French government for infrastructure.
Issue 42 - March 2010
Main reports: On 14 February the Palestinian Monetary Authority announced that a new fully electronic interbank payment system will be launched in September 2010.
A number of donors have transferred funds or made aid commitments for 2010, including the UK (£74m), the Netherlands (€40m), Norway ($40.5m), the EU (€22.8m) and Japan ($12m). Latest projections show that external financing of $1.21bn is required to cover the PA’s current budget in 2010.
The Palestine Investment Conference (PIC) for SMEs will take place in Bethlehem on 2-3 June.
Preliminary financial data for 2009 was released for companies listed on the Palestine Securities Exchange. Out of 39 listed companies, 30 companies reported profits and 26 companies recorded an improved performance compared to last year.
Issue 41 - February 2010
Main reports: On 28 January a new $50m Palestinian private equity fund was announced by the Palestine Investment Fund and Abraaj Capital. $15m has been secured for the fund and the remaining $35m is expected from investors later this year.
The Portland Trust launched a new Corporate Leadership Programme for senior Palestinian executives. Global business leaders and international experts will come to the Palestinian Territory throughout 2010. The first session, held on 6-7 February in Jericho, focused on the topic of mergers and acquisitions.
The Palestinian Information and Communications Technology Incubator (PICTI) began operating in the Gaza Strip on 1 February. It will provide support, advice and professional services to the ICT sector.
36 young entrepreneurs in Jenin and Nablus have set up new businesses after taking part in a Sharek Youth Forum programme. Start-up grants and business training were provided.
Feature: Palestine Securities Exchange
Issue 40 - January 2010
Main reports: The Palestinian Central Bureau of Statistics reports that GDP is largely unchanged, decreasing by less than 1% in Q3 2009 compared to Q2 2009. A 5.5% increase was reported compared to the same period last year.
Research by the Palestinian Federation of Industries estimates the blockade of Gaza is causing annual losses of $55m for Palestinian industrial firms. It also found that 55,000 truckloads of raw materials are required to meet the needs of reconstruction.
Groundbreaking of Rawabi, the first Palestinian planned city, took place in the first few days of 2010. Palestinian companies have been awarded major contracts for the project.
The European Investment Bank announced €5m anchor investment into the Middle East Venture Capital Fund. Once launched it will be the first venture capital fund in the Palestinian Territory and will target the ICT sector.
Issue 39 - December 2009
Main reports: A new Code of Corporate Governance has been launched by the Palestinian Capital Markets Authority (PCMA) and the National Committee for Corporate Governance. All companies are expected to follow the code. The PCMA will provide expertise and advice about the code.
The export of flowers from the Gaza Strip to the Netherlands resumed on 10 December 2009. 37 million flowers are expected to be exported over the next six months, raising revenue of approximately $8m.
Unemployment in the Palestinian Territory rose from 22.2% in Q2 2009 to 25.8% in Q3 2009 (according to the ILO definition) but fell from 27.5% in the same period last year (Q32008). Unemployment in Q3 2009 in the West Bank was 17.8%; in Gaza it was 42.3%.
Following $300m of losses in the last two years, the Palestinian Monetary Authority (PMA) has made foreign currency exchange brokers illegal in the West Bank. Banks can still carry out foreign exchange transactions for their customers and their own portfolios. It remains legal for individuals to trade foreign currency through the internet or foreign brokerage firms.
Feature: Interview with Palestinian Minister Dr. Hasan Abu-Libdeh
Issue 38 - November 2009
Main reports: Palestinian technology week took place on 2 – 6 November. 250 local and international IT companies participated in a conference on the first day and 46,000 people visited the exhibition throughout the week. International companies Microsoft, Google, Intel and Cisco were all present.
Nearly 140,000 tonnes of rubble has been removed to a crushing site in Gaza as part of a UNDP project. The rubble will be crushed and made into blocks, potentially or re-use in paving roads or as a building material.
The cornerstone of the new Al Jinan neighbourhood outside Jenin was laid by President Mahmoud Abbas on 13 October. The neighbourhood will include 1,000 housing units, a shopping centre, health clinic and other public services.
Wataniya Mobile began operating with 3.8MHz frequency on 1 November. The service starts with 40,000 users. Efforts continue to secure the release of the agreed 4.8MHz frequency.
Issue 37 - October 2009
Main reports: The PA plans to officially bid for observer status at the next WTO ministerial meeting on 21-22 October. All 153 members of the WTO have to approve the accession in a vote. If successful the PA will be able to observe all WTO meetings; one of the interim steps towards full membership.
An injection of $15m and JD 10m is needed to resolve Jordanian dinar and US dollar liquidity problems in the Gaza Strip. NIS 30m of damaged notes have been replaced recently and a transfer of NIS 300m is expected shortly.
Jordan Commercial Bank plans to expand and open a branch in every West Bank governorate. The expansion coincides with new PMA requirements that each bank must have at least $35m in capital.
PalTrade has launched a new programme to provide training in marketing from international experts. The programme will benefit 140 Palestinian companies and has specific components tailored towards the food processing and ICT sectors.
Issue 36 - September 2009
Main reports: The PNA’s current budget is funded until the end of October following an influx of more than $450m from the US, Saudi Arabia, EU, Egypt and Sweden. Prime Minister Fayyad announced September government salaries will be paid before the Eid holidays.
The Palestinian Mortgage and Housing Corporation (PMHC) will provide 20 year loans with a five year fixed rate of 6.95% for new homes in Ramallah built by the Union Construction and Investment Corporation (UCI). A number of other banks have also agreed to provide five year fixed rate loans at 7.25%.
Wataniya Mobile will withdraw from the Palestinian Territory if the 4.8MHz frequencies are not provided by 15 September. The PNA will be asked to return $140m already paid towards licence fees and provide financial compensation for other sunk costs.
Unemployment fell from 25.4% to 22.2% in Q2 2009 in the Palestinian Territory (according to the ILO definition). Unemployment in the West Bank decreased from 19.5% in Q1 2009 to 15.9% in Q2 2009. In the Gaza Strip the rate fell slightly, from 37% to 36% in the same period.
Issue 35 - August 2009
Main reports: The Ministry of National Economy, Ministry of Health and Ministry of Agriculture are working together within a new national committee for consumer protection. The committee, announced by Minister Bassem Khoury, will regulate the local market and integrate regulatory and supervisory practices across all three departments.
Fresh produce from the Jordan Valley will be bought by four of the largest UK supermarkets through new start-up charity Moon Valley, which will partner with Fresca Group, a major UK supplier, to coordinate distribution. Sinokrot Global Group will be the primary supplier to Moon Valley. Sales in excess of £20m are expected by 2013.
Israel announced the Allenby Bridge/King Hussein border will open 24 hours a day for commercial shipments. This is forecast to enable transit of 3,000 vehicles a day. Opening hours for passenger traffic have already been extended for a two month trial period.
A repaired electricity generator in Gaza is projected to double internal capacity for power generation. This will provide noticeable improvements for households and the provision of services including water and sanitation, healthcare, medicine storage and waste disposal.
Issue 34 - July 2009
Main reports: The joint Palestinian-Israeli economic committee is expected to reconvene before the end of July, after years of inaction. The Palestinians will press Israel to release frequencies for Wataniya Mobile, allow Palestinian products into Jerusalem, open borders in the Gaza Strip and renew the Palestinian Businessmen Cards.
The Palestine Islamic Bank renewed its agreement this month with Israel’s Discount Bank to clear cheques, SWIFT transactions, money transfers and cash deposits on its behalf in Israel.
PCBS launched their new National Strategy for the Development of Statistics, which should raise the quality of data produced by the statistical system while improving the dissemination and accessibility of official statistics; PCBS reports that GDP increased by 3.9% in Q1 2009 compared to Q4 2008. GDP per capita for the West Bank and Gaza Strip increased by 3.1% to $324.8 in Q1 2009 compared to Q4 2008.
Foreign investment funds from the UK and the UAE invested in companies listed on the Palestinian Securities Exchange (PSE) in June. Last month, 26.7 million shares changed hand, an increase of 139.5% from the previous month. The value of traded shares rose by 143.5% to $70.2m, while market capitalisation grew by 2.3% to reach $2.41bn.
Issue 33 - June 2009
Main reports: International donors met on 8 June in Oslo to discuss financial aid to the Palestinians. An estimated $1.4bn is needed from donors for budget support in 2009. Aid is running at less than 55% of the amount needed, with the PA having received only $328m so far this year. A further $250m to $300m is expected to be provided by donors by July 2009. The monthly Palestinian deficit is between $35m and $40m, mainly due to a decrease in Arab donor funding to the PA.
Carana Corporation has launched a five-year $20m development programme, funded by USAID, aimed at modernising and bringing Palestinian competitive products into new markets.
The Municipal Development and Lending Fund (MDLF) disbursed approximately $20m to Local Government Units (LGUs) in 2008. MDLF plans to distribute around $40m for 2009. The funds were provided by the international donor community.
The total value of Palestinian exports with a certificate of origin increased from approximately $40m in 2007 to $51.4m in 2008, according to the Palestinian Chambers of Commerce, Industry and Agriculture.
Feature: Interview with Palestinian Minister Bassem Khoury
Issue 32 - May 2009
Main reports: PCBS released its economic forecast scenarios for the year 2009. The baseline scenario forecasts a 3.1% decrease in real GDP, a 5.9% decrease in GDP per capita and a decrease in both exports and imports by 8.2% and 5.8% respectively. This assumes that the situation in the Palestinian Territory remains as it was in 2008.
The Islamic National Bank opened in Gaza on 21 April, making it the first bank to operate outside of Palestinian Monetary Authority control. The bank has capital of $20m and does not suffer problems of liquidity. The bank opened 6,000 personal accounts for civil servants, into which their salaries will be directly paid.
Palestinian Electric Company posted net profits of $6.9m for the year 2008 (up from $4.6m in 2007). It will distribute cash dividends to shareholders of 10% of capital.
PCBS reported that the percentage of Palestinian businesses expecting production to rise over the medium term (six months) was 48.4% higher in the West Bank than those expecting a decline. Gazan businessmen were less optimistic. Only 8.7% more believed that there would be an improvement in the coming six months than those who anticipated a fall, a huge decrease from February 2009 (57.7%).
Issue 31 - April 2009
Main reports: Israeli Arabs will be able to access Nablus, Tulkarm and Jenin by car on Saturdays by the end of April. The Palestine Investment Fund (PIF) and the Nablus Municipality agreed to build a JD 25m crafts and light industries complex in Nablus by 2010.
PADICO, the largest holding company in the Palestinian Territory, is reviewing restructuring options to better integrate its companies. Paltel, a subsidiary of PADICO, is close to finalising the partnership deal with Zain Communications.
MENA Geothermal has been awarded a 2009 Energy Globe Award for its application of geothermal heating and cooling technology at the Union Construction and Investment Corporation (UCI) headquarters in Ramallah.
The Israeli-Palestinian Chamber of Commerce held its first B2B meeting in February 2009. The Chamber started work in early 2009 and recently appointed Ofir Gendelman as its Chief Executive Officer. It is hoped that the Palestinian- Israeli Chamber of Commerce will be established in due course.
Issue 30 - March 2009
Main reports: Unemployment rose slightly from 27.5% to 27.9% in Q4 2008 in the Palestinian Territory (according to the ILO definition). Unemployment in the West Bank decreased from 20.7% in Q3 2008 to 19.8% in Q4 2008 but rose in Gaza from 41.9% to 44.8% in Q4 2008.
The percentage of Palestinian businesses expecting production to rise over the medium term (six months) in January 2009 was 44.9% higher in the West Bank than those expecting a decline and 70.4% higher in the Gaza Strip, where there was an overall expectation of some improvement after the conflict.
The number of hotel guests in the Palestinian Territory rose to 117,545 in Q4 2008 (an increase of 18.6% from the previous quarter). Guests spent a total of 309,638 nights, (23% more than in Q3 2008). 56% of the total nights were spent in Jerusalem hotels.
The Palestinian Securities Exchange is among the first of the Arab securities exchanges to provide an e-trading service.18.9% of total trading is already conducted online. Eight out of the nine brokerage firms for the PSE now offer online trading; Palestinian companies released their preliminary financial data for 2008.
Issue 29 - February 2009
Main reports:The Ministry of Finance released estimates for the PA 2009 budget. Nominal GDP in 2009 is expected to reach $6.3bn, slightly higher than the 2008 GDP budget ($6.1bn).
The Masterplan for ‘Rawabi’, the first planned community in Palestine, was approved by the PA in January 2009.
Paltel’s Board of Directors met last month in Jordan and agreed a general partnership framework with the Kuwaiti private telecommunications company, Zain. Wataniya Palestine Telecom (WPT), Palestine’s second mobile operator, secured a $85m loan on 4 February to support the next phase of its mobile telephone network.
Despite contributing 6.9% of GDP and employing 14.9% of workers in Q2 2008, the agriculture sector received less than 1.6% of banking credit. The agricultural sector’s share of the total micro-credit over the last twenty years has been about 11%.
Issue 28 - January 2009
Main reports:Over 200 people attended the London Business Forum on Trade and Investment with Palestine on 15-16 December. The conference was addressed by UK Prime Minister Gordon Brown, Palestinian Prime Minister Salaam Fayyad and Quartet Representative, Tony Blair. It focused on building real links between the Palestinian and British ICT, construction, finance, tourism and agricultural sectors.
Unemployment rose from 25.8% in Q2 2008 to 27.5% in Q3 2008 (according to the ILO definition). The West Bank saw a substantial increase in unemployment, from 16.3% in Q2 2008 to 20.7% in Q3 2008. In the Gaza Strip, the rate fell from 45.5% to 41.9% in the same period.
The Consumer Price Index (CPI) saw a minor decrease in November 2008 of -0.8% from October 2008. The Construction Cost Index (CCI) declined by -1.8% in November 2008 compared with October 2008. Steel dropped substantially by -16%.
