World Bank Predicts Coronavirus Will Shrink Palestinian Economy

The coronavirus crisis could cause an already constrained Palestinian economy to shrink by as much as 11% in the coming year, the World Bank said on Monday.

In a report, the bank also cautioned that the Palestinian Authority could face a financing gap of more than $1.5 billion in 2020 due to reduced revenues and increased health spending.

Prior to the novel coronavirus outbreak, the bank had predicted 2.5% growth in the Palestinian economy in the coming year.

“We now project a full-year decline of at least 7.6%, based on a gradual return to normality from (coronavirus) containment and up to 11% in the case of a slower recovery or further restrictions due to another outbreak,” the report said.

The Palestinian economy grew by only 1% in 2019, the World Bank said.

The bank praised “decisive action” by the Palestinian Authority to try to halt the spread of infection, including a state of emergency declared in March — and recently eased — that closed off several major Palestinian cities.

But, the bank said, the COVID-19 outbreak would likely deepen unemployment, especially in areas where a large number of workers had lost their jobs in the tourism industry.

It cited 13.7% unemployment among Palestinians in the fourth quarter of 2019 and a figure of 42.7% in the Hamas-run Gaza Strip.

West Bank health authorities have reported 388 cases of coronavirus, with two deaths. In Gaza, there have been 61 confirmed cases and 1 death.