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United Nations Special Coordinator for the Middle East Peace Process (UNSCO)
31 July 2010
Since 1996 UNSCO has continually monitored and reported on socio-economic conditions in the occupied Palestinian territory and in the process established an extensive socio-economic database. UNSCO does not create raw data but rather uses available data which, in the occupied Palestinian territory (oPt) is relatively abundant. However, the data that is available tends to remain dispersed and is not always automatically shared between institutions. The objective of the database is to bring together in one place a wide variety of data on socio-economic conditions and by doing so present a broader, more detailed perspective on socio-economic conditions. The purpose of this report is to: 1) broaden the access to this database through publication of the most recent data gathered; and 2) provide readers with up to date information on socio-economic conditions in the occupied Palestinian territory.
The report is divided into four sections:
Section 1 consists of a one-page fact sheet which provides a snapshot view of the socio-economic situation for the current and previous reporting period and it provides, for reference purposes, base line figures for the period just prior to the outbreak of the second
Sections 2 and 3 report on the macro-economic situation and the economic activity throughout the oPt, including private sector and banking activity. Section 4 focuses on access of goods in and out of the Gaza strip. All sections provide data on the last six reporting periods for each indicator as well as base line data, which is pre
. In addition, summary analysis on observed trends is presented below each table.
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The Palestinian CPI reached 128.50 in July 2010, an increase of 0.47% compared to June 2010. Increases were recorded in the Food and Soft Drinks sector (0.45%), in Miscellaneous Goods and Services (0.51 %) Transportation (0.58 %) and Restaurants and Cafes (0.03% each) while the Textiles, Clothing and Footwear sector experienced a 0.48% price decline.
Adjusted unemployment is the total number of unemployed in addition to those who are unemployed and don’t seek any employment.
The data indicates that the percentage of the unemployed increased from 22.0% in the 1
quarter 2010 to 22.9% in the 2nd quarter of 2010, (compared with 22.2% in the 2nd quarter of 2009). The unemployment rate increased in Gaza Strip from 33.9% in the 1st quarter 2010 to 39.3% in the 2nd quarter of 2010, while in the West Bank decreased from 16.5% in the 1st quarter 2010 to 15.2% in the 2nd quarter of 2010.
The Tulkarm governorate had the highest unemployment rate among the West Bank governorates (21.3%) followed by Qalqilia governorate at (19.0%); while Jerusalem governorate has the lowest unemployment rate (9.7%). For the Gaza Strip, the Deir AlBalah governorate has the highest unemployment rate (43.3%) followed by North Gaza governorate (41.1%), then Khan Younis governorate (40.7%).
The number of new company registrations is used as a proxy indicator for the vitality of the local economy as well as the ability of the local economy to create new employment. New company registrations in the West Bank declined by 18.80% compared to June 2010. When compared to pre-Intifada levels, new company registrations have declined by approximately 30.66 %. In for Gaza data from the Ministry of Economy in Gaza indicates 33 new registered companies for July 2010. On such basis, the number of newly registered companies in Gaza shows an increase of approximately 6.45% compared to June 2010.
Similar to bank credit and deposits, data on the Palestinian stock exchange is used as a proxy indicator of Palestinian perceptions vis-à-vis the state of the national economy. Data for July 2010 shows a decline in terms of value of shares traded of approximately 64.16 % and in terms of number of stocks traded of approximately 67.48 %. The Al-Quds index dropped by 2.78 %.
Similar to new company registrations, the area licensed for new construction is also used as a proxy indicator for economic vitality. July 2010 data shows an increase in the area licensed for new construction of approximately 10.88% compared to the previous month in the West Bank. When compared to pre
levels, area licensed for new construction has now experienced a decline of 4.19 %.
Data on bank credit is another proxy indicator for economic progress and business confidence (increasing use of bank credit, particularly in the main productive sectors) or decline (decreasing use of bank credit). The Palestine Monetary Authority provides adjusted data once every three months. In relative terms, the data shows an increase in the use of credit. Bank credit to the public sector indicates decline of approximately 5.20% in Q2-2010 when compared with Q1-2010. (Please note the PMA has adjusted the indicators for bank credit by economic activities starting Q3-2008. Due to such significant changes in the methodology, current trends cannot be compared to those prior to 2008.)
Disaggregating bank credit by the type of credit, the data shows an increase in loans and overdrafts. Loans currently represent 72.5 % of all credit extended compared to only 41% in the
Disaggregating bank credit by borrowing entity shows that consumer lending has experienced decline of approximately 5.20 % in Q2 -2010 compared to Q1-2010.
Bank deposits for the Q2- 2010 indicate a decline in public sector deposits of approximately 2.15% and a decline in private sector deposits of 1.67% compared with Q1- 2010.
In a functioning economy, an increase in the loans versus deposits ratio is perceived as a positive sign, as monies are not saved but invested or consumed, each of which acts as a stimulant for the economy. Since September 2006, this ratio had steadily declined in the oPt signaling little optimism in the prospects for the Palestinian economy. However, Q2-2010 indicates an increase in total loans of approximately 2.77 %, and decline in total deposits of 3.60 % compared with Q1-2010.
There was a significant decline in the amount of imported cooking gas, with 3,649 tonnes allowed in through Kerem Shalom, which represents an 13.06% decline compared to the volume allowed in June 2010).During the reporting period, 39,998 liters of petrol and 214,196 liters of diesel were imported for UNRWA, 36,440 liters of petrol for the private sector, and 90,500 liters of diesel for the World Bank. On 01 Jan 2010, Israel declared Nahal Oz fuel pipelines closed, with fuel being transferred to Gaza only via Kerem Shalom.
July 2010 data indicates an increase in the total number of imported truckloads to the Gaza Strip by approximately 25%, compared to June 2010 (3,946 vs. 3,156). Karni crossing has remained closed since 12 June 2007 for the movement of goods in and out of Gaza. The single conveyor belt/chute for cereals and animal feed at Karni was open for a total of 8 days. 796 truckloads of animal feed (51.9%), and wheat (38.9%), and gravel (9.02% for UNRWA 151 Housing Units at Khan Yunis Project) entered Gaza via the conveyor belt. Of the 2,984 truckloads entering Gaza during the month through Karem Shalom (Karm Abu Salem), 443 (or 14.85%) were designated for humanitarian aid agencies and the remaining 2,541 (or 85.15%) were for the private sector. Food items made up the majority of imported goods (1,458.5 truckloads, or 49%) while 1,525.5 truckloads, or 51%, were for non food items.
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