Yearbook 2018
Fiscal Sector:
An increase by 1% in the value of government revenues is anticipated. In addition, to the increase in value of government expenses by 1%, and the increase by 1.3% of the public budget deficit (Central Government).
External Sector:
An increase by 3% is anticipated in the net current account deficit value of Palestine and a decrease by 1% in the trade balance deficit value. This is attributed to the expected rise in the value of exports by 5%, despite the expected increase in value of imports by 1%. The value of net factor income is expected to increase by 1%, and value of gross national income will increase by 0.5%, while the gross national disposable income will decrease by 0.2%.
Optimistic Scenario
This scenario is based on an improved political and economic situation due to greater political reconciliation between the West Bank and Gaza Strip, the reconstruction of Gaza Strip, and assistance provided by donor countries to finance the budget of the State of Palestine (Central Government), and the increase in the clearance revenues and improved tax collection efficiency, with more income tax collection, and increase in the domestic value-added tax, and clearance value added tax collection, increased development expenditure. It also assumes a decrease in obstacles placed by Israel on the movement of people and goods inside Palestine, between regions, or with neighboring countries compared with 2018, in addition to the anticipated natural population growth in Palestine.
Expectations of the Optimistic Scenario
Real Sector:
Gross Domestic Product (GDP): It is anticipated to increase by 5% during 2019 and GDP per capita will increase by 2%. It also assumes that gross consumption value (private and public) will increase by 1% and the value of total investments will increase by 15%.
Work and Workers: An increase by 8% in the number of employees is anticipated and the unemployment rate is expected to decrease to 29% during 2019.
Fiscal Sector:
An increase in the value of government revenues by 7% is anticipated, an increase in the value of government expenses by 10%.
External Sector:
A decrease by 31% in the net current account deficit value of Palestine is anticipated as a result of the decline of trade balance deficit value by 0.4%, due to the increase in the value of exports by 8% despite the expected increase in the value of imports by 3%. And as a result of the increase in the value of net factor income and net current transfers by 18%, 11% respectively, the increase in the value of net factor income due to the increase in number of workers in Israel as a result of the assumption of freedom of movement of people and goods in Palestine. This would increase gross national income value by 6%, and gross national disposable income value by 6.4%.
Pessimistic Scenario
This scenario accounts for the deterioration in the volatile political and economic situation. It assumes a decrease in aid from donor countries to finance the budget of the State of Palestine (Central Government), fluctuations in the transfer of clearance revenues, a decline in both collection of the domestic value added tax and clearance value added tax. It also presumes a decrease in income tax collection, and a decrease in the development expenditures. It assumes that obstacles placed by Israel on the movement of people and goods inside Palestine, between regions, or with neighboring countries will increase and the number of workers in Israel will decrease as a result of the anticipated closures.
Expectations of the Pessimistic Scenario
Real Sector:
Gross Domestic Product (GDP): GDP is expected to decrease by 3% during 2019 and GDP per capita will decrease by 5%. In addition, gross consumption value (private and public) will decrease by 3% and the value of total investments will decrease by 4%.
Work and Workers: The number of Palestinian employees in Israel is anticipated to decrease by 12% which will lead to an increase of the unemployment rate to reach 33% during 2019.
Fiscal Sector:
Government revenues value are expected to decrease by 9% as a result of Israel freezing a proportion of tax revenues, plus an increase in tax evasion, a decrease in the value of government expenses by 12%.
External Sector:
The net current account deficit value of Palestine is anticipated to increase by 40% due to an expected decrease in the net factor income value by 9% assuming that the number of workers in Israel will decrease and constraints imposed within Palestine will increase, in addition to a decrease in net current transfers value by 45%. Despite the decrease of trade balance deficit value by 5% as a result of a decrease in the value of imports by 7%, and a decrease in the exports value by 9%. A decrease by 3% is anticipated in gross national income value and a decrease by 7% in the value of gross national disposable income.
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