Real quarterly GDP in the occupied Palestinian territory (oPt) in Q4/2014 was higher than in Q3/2014, but lower than in Q4/2013. Year-on-year growth was registered only in the West Bank where the economy expanded by 4.9%. In the Gaza Strip, GDP grew by 18.4% compared to the previous quarter following the end of hostilities, but remained 18.3% below the level of the same quarter in 2013. In Q4/2014 the Gaza economy constituted only 22% of the overall Palestinian economy, and the Strip's nominal GDP per capita was less than half the West Bank's.
In the West Bank, between Q4/2013 and Q4/2014 there was a significant expansion in real value added in financial and insurance activities (15.3%), followed by agriculture, forestry and fishing (6.5%) as well as the transportation and storage sector (5.9%). Decreases in real value added were registered primarily in construction sector (-4.2%) as well as the wholesale and retail trade sector (-2.4%).
During the same period in the Gaza Strip, significant contractions were registered across all sectors, notably in the construction sector (-77.1%), agriculture, forestry and fishing (-31%) as well as the wholesale and retail trade sector (-27.4%). Two exceptions were financial and insurance activities (17.3%) as well as public administration and defence (8.8%).
The services sector continues to constitute the largest one in the West Bank economy in Q4/2014, accounting for 18.7% of GDP. This sector was followed by wholesale and retail trade (17.8%) and mining, manufacturing, electricity and water (15.3%).
In the case of the Gaza Strip, public administration and defence represented the largest proportion of GDP in Q4/2014, accounting for 35.6% of the total, followed by services (25.5%) and wholesale and retail trade (12.5%). The construction sector, which accounted for 12.5% of Gazan GDP in Q4/2013, saw its share reduced to 4.2% by Q4/2014.
Final consumption in the West Bank represented 109.2% of GDP in Q4/2014. Household final consumption reached 86.3% of GDP while government final consumption was 20.8% of GDP. The value of exports of goods and services from the West Bank grew by 24.4% between Q4/2013 and Q4/2014 while that of imports grew by 13.9%. The West Bank trade deficit represented 36.6% of GDP in the quarter.
In the Gaza Strip, final consumption in Q4/2014 was equivalent to 169.9% of GDP, 100% of it household final consumption and 47.8% of it government final consumption. Gross capital formation was negative during the quarter, representing -19.4% of GDP. Gross fixed capital formation has seen a dramatic year-on-year decline, shrinking by 65.4% in the year to Q4/2014. Between the fourth quarters of 2013 and 2014 the value of exports of goods and services from the Gaza Strip declined by 39.5%, while there was a large increase (29.5%) in imports, resulting in a trade deficit equivalent to 46.5% of GDP in Q4/2014.
The industrial production index (IPI) increased to 110.22 by December 2014 (base year is 2011). Activity in manufacturing (with a share of 80.56% in the IPI) declined in October but increased in November and December. Activity in the water and electricity supply sector (with a share of 14.85% in the IPI) decreased in October but increased in November and December. Activity in the mining and quarrying sector (with a share of 4.59% in the IPI) decreased in October and November but increased in December.
The business cycle index reflected a contraction in the West Bank and Gaza Strip throughout the quarter. Notably, the index declined most severely in the Gaza Strip in November (-15.5) and in the West Bank in October (-15.8).