IMF chief: Palestinian economy devastated
DUBAI: The Israel-Hamas war has devastated the economies of both the embattled Gaza Strip and the occupied West Bank, the International Monetary Fund (IMF) chief said on Sunday, adding that only “durable peace” would improve the outlook.
“The Palestinian economy’s dire outlook is worsening as the conflict persists,” managing director Kristalina Georgieva said during a visit to Dubai.
“Only a durable peace and political solution will fundamentally change it.
“Economically, the impact of the conflict has been devastating.”
In the war-ravaged coastal territory, economic activity dropped 80% from October through December compared with a year earlier, the IMF chief said.
In the West Bank, the drop was 22%, she added.
The larger Palestinian territory has been hit hard by Israel’s withdrawal of 130,000 work permits, the proliferation of checkpoints that has heavily disrupted transportation, the loss of tourism, being cut off from Gaza and Israel’s withholding of tax revenues from the Palestinian Authority.
Beyond the Palestinian territories, the Israel-Hamas war has also hit the tourism sectors of neighbouring countries such as Egypt and Lebanon, Georgieva said.
Meanwhile, attacks on commercial shipping by Yemen’s Huthi rebels, which the group says are in solidarity with Palestinians in Gaza, is leading to “rising freight costs and reduced Red Sea transit volumes (which are) down by nearly 50% this year in our PortWatch data”, Georgieva said.
For the Middle East and North Africa region as a whole, GDP growth is expected to improve from last year but will likely fall below earlier IMF projections, partially because of the Israel-Hamas war, the fund reported in its latest forecast last month.
The IMF now sees the economies of the region expanding 2.9% this year, a decrease of half a percentage point from its October forecast.