Palestine Economy Portal.

In conjunction with the Corona pandemic, the Palestinian economy has registered a 5% decline in GDP during the first quarter of 2020, as most economic activities witnessed a noticeable decline.

The construction sector witnessed the highest decline of about 21%, followed by the industrial sector, which declined by 9%, then the agriculture sector by 9%, the services sector by about 3%, and the services sector by 3%, which constitutes the highest weight in terms of value among economic activities. It is the largest contributor to the GDP.

Regarding the public finance sector in Palestine, the head of the Palestinian Central Bureau of Statistics, Ola Awad, explained in an interview with "Palestine Economy Portal" that net domestic revenues declined by 14% during the first quarter of 2020, reaching about 3.4 billion shekels, while it decreased in the second quarter to reach It amounted to 1.9 billion shekels due to the non-receipt of clearance funds, and public spending decreased by about 40% during the first quarter of 2020 to reach about 3.4 billion shekels, and during the second quarter 2020 it reached about 3.5 billion shekels, meaning that the current balance deficit amounted to 1.6 billion shekels.

As for public debt, it rose by about 3.3% during the first quarter of 2020 to reach 10 billion shekels, accounting for about 18% of GDP, and the share of domestic government debt during this quarter was 55% compared to 45% for external government debt.

Awad commented on the status of the banking sector saying the sector is facing great challenges as a result of the current political situation in addition to the Coronavirus pandemic, and based on the data of the Monetary Authority, the volume of facilities granted reached about 10 billion dollars, of which 8 billion were loans, among which 81% were facilities for the private sector, and 18% were loans. For the public sector, and the rest for non-residents of Palestine.

Credit facilities increased in the second quarter compared to the first quarter 2020 by about 4%, while they increased in the first quarter of 2020 compared to the fourth quarter of 2019 by about 2%.

On the other hand, the total deposits of resident customers amounted to $ 13 billion, of which 12.6 went to the private sector from companies and individuals, while non-resident deposits amounted to $ 0.7 billion, 91% of all deposits belong to citizens.

On the trade balance, which is going through a persistent deficit, Awad said that the volume of imports of goods and services amounted to about $ 8.4 billion, while the volume of exports reached $ 2.6 billion, meaning that there is a deficit in the Palestinian trade balance.

Imports decreased during March of 2020 by 5% compared to the previous month, and thus there is an impact on foreign trade movement in Palestine, as import is one of the most important tributaries of the Palestinian economy.

Awad stressed that the volume of investment in Palestine has been greatly affected, and it is expected that investments will decrease by 43% based on economic forecasts, and of course, the recovery will need a number of years, depending on the regional and international environment and the extent of Palestine affected by the repercussions of the Coronavirus pandemic.

Regarding the Clearing crisis, Awad explained that the clearance funds contribute to 70% of the total net public revenue value. The government sector is a major lever for the national economy, as it constitutes more than 22% in the Palestinian economy, and therefore there is a direct impact on the economy's wheel with all its components in pumping that money into the Palestinian market and on all activities and sectors."

Awad said that the government should continue its strategy towards a gradual implementation of the policy of economic and commercial separation from the Israeli occupation. She added: "There must be complete tax exemption for promising products, provision of infrastructure, support for the use of clean energy that leads to a reduction in the costs of the production process, thus lowering the price of the product, reducing export procedures, and monitoring the quality of products by the government in order to be able to compete in the markets." Globalism".

Awad indicated the support of productive sectors such as agriculture and industry and the development of promising sectors such as information technology and tourism, as these sectors are the sectors that generate employment, in addition to supporting and supporting small and micro enterprises, which constitute the vast majority of economic establishments.