Economy of the State of Palestine

Economy of Palestine

Ramallah, the financial hub of Palestine
Currency	None de jure. Currencies generally used in Palestine include: Egyptian pound (EGP)[citation needed] Israeli new shekel (ILS; ₪)[1] Jordanian dinar (JOD)[1] United States dollar (USD)[1]
Fiscal year	Calendar year
Trade organisations	OIC, Group of 77
Country group	Developing/Emerging[2] Lower-middle income economy[3]
Statistics
Population	4,569,087 (2018)[4]
GDP	$10 billion (2012 est.)
GDP growth	1.2% (2017) 0.9% (2018) −2.5% (2019e) 2.1% (2020f)[5]
GDP per capita	$876 (Gaza Strip) $1924 (West Bank)[6]
GDP by sector	Agriculture: 5.5% Industry: 23.4% Services: 71.1% (2014 UN data)[7]
Inflation (CPI)	2.7% (June 2013)[8]
Population below poverty line	25.8% (2011 est.)[9]
Human Development Index	0.690 medium (2018)[10] (119th) 0.597 medium IHDI (2018)[11]
Labour force	1,316,023 (2019)[12] 32.0% employment rate (2018)[13]
Labour force by occupation	Agriculture: 12% Industry: 23% Services: 65% (2008 est.)
Unemployment	27.5% (Q1 2013)[14]
Main industries	Cement, quarrying, textiles, soap, olive-wood carvings, mother-of-pearl souvenirs, food processing
External
Exports	$720 million (2011)[15]
Export goods	Olives, fruit, vegetables, limestone, citrus, flowers, textiles
Main export partners	Israel 86%  Saudi Arabia 5.87%  Jordan 5.12%  Turkey 4.34%  United Arab Emirates 1.45%  United States 1.13% (2023)[16]
Imports	$4.2 billion (2011)[15]
Import goods	Food, consumer goods, construction materials
Main import partners	Israel 38.67%  Turkey 10.5%  China 9.42%  Jordan 5.78%  Germany 5.03% (2021)[16]
Public finances
Government debt	$4.2 billion (June 2013)[17]
Budget balance	$1.3 billion (13% of GDP; 2012 est.)[18]
Revenues	$2.2 billion (2012 est.)
Expenses	$3.54 billion (2012)[18]
Foreign reserves	$464 million (march 2016)[19][20] (163nd)
[21][22] All values, unless otherwise stated, are in US dollars.

The economy of the State of Palestine refers to the economic activity of the State of Palestine. Palestine receives substantial financial aid from international donors, including governments and international organizations. In 2020, the inflation rate of -0.7% and unemployment rate was 25.9%.^[23] While exports were recorded at US$ 1 billion, with an import value of US$ 6 billion.^[23] Contributors to the national economy is service sector (47%), wholesale and repair (19%), manufacturing (12%), agriculture (7%), finance and banking (3%), construction (5%), information technology (5%) and transportation sector (2%).^[23]

This aid is crucial for supporting the Palestinian Authority and funding public services and development projects. Palestinians working abroad send money back to their families in Palestine. These remittances provide a significant source of income for many households. Palestinian economy relies heavily on donations and international aid from various sources, including UNRWA, Qatar, Turkey, the European Union, and non-governmental organizations.^[24][25] Contribution to the economy also comes from remittances sent by the Palestinian diaspora.^[26][27] Gazans experience additional difficulties as they are subjected to a siege, with Israel controlling the movement of people and goods in and out of Gaza. Nonetheless, there are limited business opportunities available in Gaza. Contrastingly, the West Bank provides Palestinians with more diverse opportunities.^[28] Some individuals own businesses in tourism-driven areas such as Bethlehem and Jerusalem, as tourism serves as a significant source of income.^[29][30] Others engage in various types of enterprises in cities like Ramallah and Hebron, ranging from trading to construction and IT services.^[31][32] Furthermore, approximately 100,000 Palestinians find employment in Israeli companies as low-cost labor, earning significantly less than the average Israeli worker.

While trade is restricted due to political factors, Palestine does engage in some export activities. Palestinian products, such as agricultural goods and traditional crafts, are exported to regional and international markets. Despite the challenges, tourism plays a role in the Palestinian economy. The historical and cultural significance of places like Bethlehem and Jerusalem draws tourists. Agriculture remains a crucial sector, with Palestinians cultivating crops, producing olive oil, and raising livestock. Some Palestinians work in various service industries, including education, healthcare, and technology. Palestine hosts numerous international non-governmental organizations (NGOs) and humanitarian agencies, which contribute to the local economy and provide employment.