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Source: United Nations Special Coordinator for the Middle East Peace Process (UNSCO)
31 January 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 socioeconomic conditions and by doing so present a broader, more detailed perspective on socioeconomic 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 socioeconomic 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 Intifada.

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 Al-Aqsa intifada. In addition, summary analysis on observed trends is presented below each table.

For further information please contact: Gaza Strip: Raed Raqeb

1 The base year for GDP is 2004
2 These numbers may be adjusted
3 No available baseline data on the year 2000.
4 These numbers may be adjusted
5 For a more detailed report on sections C (Macro-economy) and D (Private sector), see data below.
6 CPI Base year for 2004 = 100
7 MoNE data does not include aggregates or aid flows in Aug 2000.
8 On indicators measured on quarter basis, 2nd quarter of 2000 was used as a baseline since Intifada broke up in the third quarter.
9 * Please note that data for Q3-2008 has been adjusted by the PMA for all bank credit categories.
10 Adjusted unemployment is calculated by adding discouraged workers (i.e. unemployed but no longer seeking work) to the ILO standard.
11 Effective closure days are calculated by adding all days when a crossing was fully or partially closed excluding weekend and holiday. Partial closure means that crossing was partially closed for more than one hour but not for a full day where it is considered full closure. Karni - conveyor belt/chute -The conveyor belt/chute for cereals and animal feed at Karni is the only operational one. Rafah Crossing for passengers is partially opened for humanitarian purposes.

The Palestinian CPI reached 127.83 in January 2010, an increase of 0.06% compared to December 2009. Increases were recorded in the medical care sector (0.48%), in restaurants and cafes (0.39%) housing (0.70%) and in communications (0.17% each). the food and soft drinks experienced a 0.47% price decline.

The overall unemployment rate decreased from 25.8% in the 3rd quarter 2009 to 24.8% in the 4th quarter 2009, as compared with 27.9% in the 4th quarter 2008. the Gaza Strip experienced a decline from 42.3% in the 3rd quarter 2009 to 39.3% in the 4th quarter 2009 while the rate in the West Bank increased from 17.8% to 18.1%. Hebron governorate registered the highest unemployment rate among the West Bank governorates (23.6%) followed by Qalqilia governorate at (23.4) while Jericho and Aghwar governorate registered the lowest unemployment rate (7.1%). For Gaza Strip, Khan Younis governorate registered the highest unemployment rate (50.4%) followed by Rafah governorate (39.1%), then Gaza city governorate (38.2%).

12 Adjusted unemployment is the total number of unemployed in addition to those who are unemployed and don’t seek any employment.

The exchange rate between the US dollar and the NIS a declined by approximately 1.59% in January 2010 compared to December 2009.
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 6.25% compared to December 2009. When compared to pre-Intifada levels, new company registrations have dropped by approximately 9.49%. As for Gaza, data from the Ministry of economy in Gaza indicate 29 new registered companies for January 2010. If considering data from ministry of economy in Gaza, the number of newly registered companies in Gaza an increased by approximately 61.11% compared to December 2009.

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 January 2010 shows a declined in terms of value of shares traded of approximately 45.77% and in terms of number of stocks traded of approximately 38.74%. The Al-Quds index increased by 1.91%.

Similar to new company registrations, the area licensed for new construction is also used as a proxy indicator for economic vitality. January 2010 data shows a decline in the area licensed for new construction of approximately 77.85% compared to the previous month in the West Bank. When
compared to pre intifada levels, area licensed for new construction has now a decline by 60.18%.

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, general trade and public services show a decrease in the use of credit. Bank credit to the public sector indicates a decrease of approximately 3.56% in Q3-2009 when compared with Q2-2009. (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 66.4% of all credit extended compared to only 41% in the pre-Intifada period.

Disaggregating bank credit by borrowing entity shows that consumer lending has experienced a decrease of approximately 3.56% in Q3-2009 compared to Q2-2009.

Disaggregating bank credit by borrowing entity shows that consumer lending has experienced a decrease of approximately 3.56% in Q3-2009 compared to Q2-2009.

Bank deposits for the Q3- 2009 indicate an increase in public sector deposits of approximately 22.01% and an increase in private sector deposits of 4.19% compared with Q2- 2009.

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.Q3- 2009 figures however marked the second quarterly increase after two years of decline, with a 7.68% jump from Q2- 2009.

The volume of registered fuel sales in the Gaza Strip continued to decline in January 2010. At the same time, there was a significant decline in the amount of imported cooking gas with 259 tonnes allowed in through Nahel Oz Crossing. (78.49% decline compared to the volume allowed in December 2009). During the reporting period, 40,000 liters of petrol were imported for private sector, through the Nahal oz crossing. 2,062 tons of cooking gas were pumped through the newly established fuel pipelines at Kerem Shalom. (42.31% increased compared to December 2009). Comparing allowed in cooking gas for both December and January , an overall decline of about 12.51% was registered in January On 01 Jan 2010, Israel declared that Nahal Oz fuel pipelines were now closed and that fuel will be only transferred to Gaza via Kerem Shalom. However, Nahal Oz was exceptionally opened on 19 Jan and 40,000 litres of petrol (for UNRWA), 259 tonnes of cooking gas and 752,079 liters of the power plants' fuel were transferred through.

Exports have stopped altogether except for limited agricultural exports in January 2010. Israel allowed Gaza to export flowers to Europe. In January 2010, 44 trucks of flowers and carnations were exported. January 2010 data indicates a decline in the total number of imported truckloads to the Gaza Strip by approximately 22%, compared to December 2009 (2,061 vs. 2,657). 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.
551 truckloads of animal feed (46.6%), wheat (52.5%), chickpeas (0.2%), carob (0.4%) and gravel (0.4%) for the Water Authority entered Gaza via the conveyor belt. Of the 1,413 truckloads entering Gaza during the month through Karem Shalom (Karm Abu Salem), 173 (or 12.24%) were
designated for humanitarian aid agencies and the remaining 1,240 (or 87.76%) were for the private sector. Food items made up the majority of imported goods (840.5 truckloads, or 59%) while 572.5 truckloads, or 41%, were for non food items. Glass imports stopped as of 17 February; since 29 December 2009 a total of 103 truckloads carrying 65,189 sheets were imported.

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