Socio-Economic Developments in the oPt First Half 2008

The Palestinian economy continued to stagnate with real Gross Domestic Product (GDP) in the first half of 2008 less than 1 percentage point above its level in the first half of 2007. It is important to note that there was significant regression in the GDP in 2006 and almost no growth in 2007. If formal accounting items are excluded, the real GDP declined by about 0.5 percent with the public sector declining by 1.7 percent and the private sector down about 0.2 percent. Particularly dire conditions in Gaza lowered average growth overall, but socio-economic conditions in the West Bank remained stagnant, especially in parts of the private sector.

Projections for 2008 as a whole suggest overall GDP in the oPt will be down about 1.2 relative to 2007 and about 9.5 percent relative to 1999. (This excludes the effects of the Israeli assault on Gaza in the last week of the year.) Per capita GDP is projected to decline 3.7 percent for the year and nearly 30 percent relative to 1999. The occupied Palestinian territory (oPt) continued to have the worst performing economy in the Middle East and North Africa sub-region (MENA).