OPT socio-economic report (June 2008) – UNSCO



Since 1996 UNSCO has continually monitored and reported on socio-economic conditions in the occupied Palestinian territory and in the process established an extensive socio-economic database. UNSCO does not create raw data but rather uses available data which, in the occupied Palestinian territory is relatively abundant. However, the data that is available tends to remain dispersed and is not always automatically shared between institutions. The objective of the database is to bring together in one place a wide variety of data on socio-economic conditions and by doing so present a broader, more detailed perspective on socio-economic conditions. The purpose of this report is to: 1) broaden the access to this database through publication of the most recent data gathered; and 2) provide readers with up to date information on socio-economic conditions in the occupied Palestinian territory.

The report is divided into three sections:

Section 1 consists of a one-page fact sheet which provides a snapshot view of the socioeconomic situation of the current and previous reporting period and for reference purposes provides base line figures for the period just prior to the outbreak of the second Intifada.

Section 2 and 3 report on the Macro-economic and the Private sector and banking modules of the UNSCO database. They provide data on the last six reporting periods for each indicator as well as base line data. In addition, some initial analysis on observed trends is given below each table.

1 For a more detailed report on sections C (Macro-economy) and D (Private sector), see data below.

2 CPI Base year 2004 = 100

3 MoNE data does not include aggregates or aid flows.

4 Adjusted unemployment is calculated by adding discouraged workers (i.e. unemployed but no longer seeking work) to the ILO standard.

5 Effective closure days are calculated by adding all days when a crossing was fully or partially closed excluding weekend and holidays.

  • Exchange rate
  • Consumer Index by region and expenditure group
  • Truck Movement
  • Palestinian Imports and Exports
  • Volume of registered fuel sales
  • Palestinian Trade with Israel

For further information please contact: Ramallah: Bushra Mukbil mukbil@un.org; Gaza Strip: Raed Raqeb raqeb@un.org

The exchange rate between the US dollar and the NIS has continued its decrease in June, 2008. The declining dollar could benefit the Palestinian economy, as it could make imports cheaper.

Registered fuel sales in the Gaza Strip increased in June 2008, when compared to May. A significant factor for this increase is that number of effective closure days were less in June (4 effective & 5 partial) than in May (7 effective & 7 partial).

The Palestinian CPI figures for June 2008 show an increase of .58% from May 2008. CPI increased in the West Bank by .61%, and .62 % in the Gaza Strip. If compared to June 2007, the CPI has risen by 10.5% in the oPt, 10.9% in the West Bank, and 14.9% in the Gaza Strip. It is worth noting that construction related costs have increased markedly since May 2008 as a result of the announcement of major housing projects at the Bethlehem Investment Conference.

Truck movement to Gaza has been restricted to the import of limited humanitarian supplies since 12 June 2007. Exports were suspended at the same time with only approximately 78 truckloads of strawberries and flowers grown with the support of the Netherlands exported in December 2007. Compared with May, June data indicates an increase in the total of imported truckloads to the Gaza Strip, by approximately 19.96%. However, if compared to June 2007, the total of imported truckloads has decreased by 58.5%.

The negative consequences of the closure of the Gaza crossings for Israel continued. The IsraeloPt trade balance – which had reached almost half a billion per quarter in the early part of 2007 – has dropped by 15 percent since the first quarter of 2007 – primarily as a result of declining imports from Israel into the oPt. A second notable finding is that despite the suspension of exports from Gaza, total oPt exports to Israel remained at the same level as during previous quarters indicating an increase in exports from the West Bank.

  • Number of Company Registrations by region and legal status
  • Area licensed for Construction
  • Bank Credit
  • Value of loans and deposits

For further information please contact: Ramallah: Bushra Mukbil mukbil@un.org; Gaza Strip: Raed Raqeb raqeb@un.org

The number of new company registrations is used as a proxy indicator for the vitality of the local economy as well as the ability of the local economy to create new employment. New company registrations in the West Bank decreased in June 2008, by approximately 11.11%. However, if

compared to pre-Intifada levels new company registrations have dropped by approximately 54.58%. As for Gaza, figures for the Ministry of Economy in Ramallah show that the number of new company registrations has remained Zero, while data for the Ministry of Economy in Gaza indicate 23 new registered companies for the month of June. The expectations for the possible impact of the Calm have raised optimism among business people in Gaza. As a result, a number of company owners have reactivated their registration.

Similar to new company registrations, the area licensed for new construction is also used as a proxy indicator for economic vitality. If compared with May, areas licensed for new construction for the West Bank decreased in June by 6.4%. However, if compared with pre-Intifada levels, areas

licensed for new constructions have dropped by approximately 57.6 As for the Gaza Strip, areas licensed for new construction have increased by 21.11 % in June, but if compared to June 2007, area licensed for new construction in Gaza has sharply dropped by 65.5%.

If disaggregated by type, and if compared with Q3-2007, it appears that in Q4-2007 non-residential construction decreased in the oPt by 70.6%, while residential construction slightly decreased by 1.41%.

Data on bank credit is used as a proxy indicator for perceptions of economic progress (increasing use of bank credit, particularly in the main productive sectors) or decline (decreasing use of bank credit). The Palestine Monetary Authority has adjusted the indicators for bank credit by economic activities starting Q1-2008. Due to such significant changes, it is not accurate to observe trends and developments and compare it to previous quarters using the old system.

Disaggregating bank credit by the type of credit, confirms the relative stability of the banking sector. Loans have decreased by 2%, and overdrafts have increased by 2%.

Disaggregating bank credit by the borrowing entity shows that consumer lending declined significantly in the first quarter of 2008. The drop is by 16% compared to the first quarter of 2007. One of the most likely reasons for this development is the continued risk-adverse stance of Palestinian banks.

Bank deposit data for the fourth quarter in 2007 indicates a continued sizeable increase in private sector deposits (both in terms of public and private sector bank deposits). Compared with the fourth quarter of 2007, bank deposits in January 2008 showed an increase of 5.66 percent.

In an efficient economy, an increase in the loans versus deposits ratio is a positive sign as monies are not saved but invested or consumed, stimulating the economy. Between September 2006, and the end of January 2008, this ratio has steadily declined in the oPt signaling little optimism concerning the Palestinian economy which limits appetite for domestic investment and thus increases deposits. The sharp drop since the third quarter of 2007 signals heightened concern with regard to overall economic performance, most likely due to the events in Gaza since June 2007.

Similar to bank credit and deposits, data on the Palestinian stock exchange is used as a proxy indicator of Palestinian perceptions vis-à-vis the state of the national economy. Data for June 2008 shows a decrease in trade at the stock exchange both in terms of value and number of stocks

traded. The Al-Quds index has also declined in June, by approximately 1.17%.


2019-03-12T18:34:04-04:00

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