Gaza Strip Economy Profile 2002

Economy - overview

Economic output in the Gaza Strip - under the responsibility of the Palestinian Authority since the Cairo Agreement of May 1994 - declined by about one-third between 1992 and 1996. The downturn was largely the result of Israeli closure policies - the imposition of generalized border closures in response to security incidents in Israel - which disrupted previously established labor and commodity market relationships between Israel and the WBGS (West Bank and Gaza Strip). The most serious negative social effect of this downturn was the emergence of high unemployment; unemployment in the WBGS during the 1980s was generally under 5%; by 1995 it had risen to over 20%. Israel's use of comprehensive closures decreased during the next few years and, in 1998, Israel implemented new policies to reduce the impact of closures and other security procedures on the movement of Palestinian goods and labor. These changes fueled an almost three-year-long economic recovery in the West Bank and Gaza Strip; real GDP grew by 5% in 1998 and 6% in 1999. Recovery was upended in the last quarter of 2000 with the outbreak of Palestinian violence, triggering tight Israeli closures of Palestinian self-rule areas and a severe disruption of trade and labor movements. In 2001, and even more severely in early 2002, internal turmoil and Israeli military measures in Palestinian Authority areas resulted in the destruction of capital plant and administrative structure, widespread business closures, and a sharp drop in GDP. Another major loss has been the decline in income earned by Palestinian workers in Israel.

GDP (purchasing power parity)

purchasing power parity - $750 million (2001 est.)

GDP - real growth rate

-35% (2001 est.)

GDP - per capita (PPP)

purchasing power parity - $625 (2001 est.)

GDP - composition by sector

agriculture: 9%
industry: 28%
services: 63% (includes West Bank) (1999 est.)

Population below poverty line

1% 60% (2001 est.)

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

1% (includes West Bank) (2001 est.)

Labor force

NA

Labor force - by occupation

services 66%, industry 21%, agriculture 13% (1996) (1996)

Unemployment rate

26% (includes West Bank) (2001 est.)

Budget

revenues: $930 million
expenditures: $1.2 billion, including capital expenditures of $15 million (includes West Bank) (2000 est.)
note:

Industries

generally small family businesses that produce textiles, soap, olive-wood carvings, and mother-of-pearl souvenirs; the Israelis have established some small-scale modern industries in an industrial center

Industrial production growth rate

NA%

Electricity - production

NA kWh; note - electricity supplied by Israel

Electricity - consumption

NA kWh

Electricity - exports

0 kWh (1999)

Electricity - imports

NA kWh; note - electricity supplied by Israel

Agriculture - products

olives, citrus, vegetables; beef, dairy products

Exports

$603 million f.o.b., includes West Bank (2001 est.)

Exports - commodities

citrus, flowers

Exports - partners

Israel, Egypt, West Bank

Imports

$1.9 billion c.i.f., includes West Bank (2001 est.)

Imports - commodities

food, consumer goods, construction materials

Imports - partners

Israel, Egypt, West Bank

Debt - external

$108 million (includes West Bank) (1997 est.)

Economic aid - recipient

$800 million disbursed (includes West Bank) (2001 est.)

Currency

new Israeli shekel (ILS)

Currency (code)

ILS

Exchange rates

new Israeli shekels per US dollar - 4.2757 (December 2001), 4.2057 (2001), 4.0773 (2000), 4.1397 (1999), 3.8001 (1998), 3.4494 (1997)

Fiscal year

calendar year