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Gaza Strip Economy

    Economy—overview: Economic conditions in the Gaza Strip—under the responsibility of the Palestinian Authority since the Cairo Agreement of May 1994—have deteriorated since the early 1990s. Real per capita GDP for the West Bank and Gaza Strip (WBGS) declined 36% between 1992 and 1996 owing to the combined effect of falling aggregate incomes and robust population growth. The downturn in economic activity 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. The most serious negative social effect of this downturn has been the emergence of chronic unemployment; average unemployment rates in the WBGS during the 1980s were generally under 5%, by the mid-1990s this level had risen to over 20%. Since 1997 Israel's use of comprehensive closures has decreased 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 positive changes to the conduct of economic activity, combined with international donor pledges of over $3 billion made to the Palestinian Authority in November, may fuel a moderate economic recovery in 1999.

    GDP: purchasing power parity—$1.1 billion (1998 est.)

    GDP—real growth rate: 2.2% (1998 est.)

    GDP—per capita: purchasing power parity—$1,000 (1998 est.)

    GDP—composition by sector:
    agriculture: 33%
    industry: 25%
    services: 42% (1995 est., includes West Bank)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): 8.8% (1997 est.)

    Labor force: NA
    note: excluding Israeli settlers

    Labor force—by occupation: services 66%, industry 21%, agriculture 13% (1996)

    Unemployment rate: 26.8% (1997 est.)

    Budget:
    revenues: $816 million
    expenditures: $866 million, including capital expenditures of $NA (1997 est.)
    note: includes West Bank

    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—production by source:
    fossil fuel: NA%
    hydro: NA%
    nuclear: NA%
    other: NA%

    Electricity—consumption: NA kWh

    Electricity—exports: NA kWh

    Electricity—imports: NA kWh

    Agriculture—products: olives, citrus, vegetables; beef, dairy products

    Exports: $781 million (f.o.b., 1997 est.) (includes West Bank)

    Exports—commodities: citrus

    Exports—partners: Israel, Egypt, West Bank

    Imports: $2.1 billion (c.i.f., 1997 est.) (includes West Bank)

    Imports—commodities: food, consumer goods, construction materials

    Imports—partners: Israel, Egypt, West Bank

    Debt—external: $108 million (1997 est.)

    Economic aid—recipient: $NA

    Currency: 1 new Israeli shekel (NIS) = 100 new agorot

    Exchange rates: new Israeli shekels (NIS) per US$1—4.2260 (November 1998), 3.4494 (1997), 3.1917 (1996), 3.0113 (1995), 3.0111 (1994)

    Fiscal year: calendar year (since 1 January 1992)

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)