WASHINGTON, The economic outlook in Gaza is “increasingly untenable” due to longstanding constraints on growth, large cuts in aid, and revenues losses, the International Monetary Fund said on Monday.
“Gaza is suffering disproportionately, with its economy shrinking and unfolding humanitarian catastrophe. Overall GDP growth is projected to languish below 2 percent per year,” the IMF said in its report on the West Bank and Gaza to the Ad Hoc Liaison Committee.
“The intended withholding of clearance revenues under new Israeli legislation will seriously undermine the already fragile fiscal situation.” Additionally, the deepening rifts between stakeholders and growing violence further “imperil prospects for peace.” The IMF blames this on the protests in Gaza amid the relocation of the US embassy to Jerusalem and the Palestinian Authorities skepticism about the US role as a neutral party in the peace process.
“The overriding challenge is to revive growth and alleviate poverty in the face of shrinking resources,” the report suggested. “More than ever this will depend on the Palestinian authorities, Israel, and donors coming together to ensure a comprehensive approach to reforms.” It recommended measures to protect public service delivery, social spending and investment, and avoiding expenditure disruptive to growth.
“Faster progress to systematically reduce ‘fiscal leakages’, based on fair and transparent discussions between the Israeli and Palestinian authorities, will be imperative,” said the IMF.
Source: Kuwait News Agency