Stagnation of the Palestinian Economy and Sharp Decline in Gross Domestic Product During 2025

Ayser Al-Eis / Anadolu

* Data from the Palestinian Central Bureau of Statistics and the Monetary Authority: - The Gross Domestic Product recorded a "sharp decline" in the Gaza Strip during 2025 by 84 percent and 13 percent in the West Bank - Construction activity recorded the highest decline by 41 percent, with 29 percent in the West Bank and 99 percent in Gaza - The volume of foreign trade recorded a decline of 12 percent, and imports recorded a decline of 17 percent - The unemployment rate recorded 46 percent, with 28 percent in the West Bank and 78 percent in Gaza

The Palestinian Central Bureau of Statistics and the Monetary Authority revealed, on Sunday, stagnation in the Palestinian economy and a sharp decline in the Gross Domestic Product during 2025.

This came in a joint statement from the Palestinian Central Bureau of Statistics and the Monetary Authority regarding the Palestinian economic harvest for 2025 and economic forecasts for 2026.

The statement mentioned that the Gross Domestic Product in Palestine recorded a "sharp decline" in the Gaza Strip by 84 percent compared to 2023, in addition to a decline in the West Bank by 13 percent during the same period.

It noted that construction activity recorded the highest decline by 41 percent, with 29 percent in the West Bank and 99 percent in Gaza.

Meanwhile, services activity recorded a general decline of 25 percent; 12 percent in the West Bank and 82 percent in Gaza, while agricultural activity declined by 92 percent in Gaza, compared to stability in the West Bank during the same period.

According to the statement, the volume of trade exchange in Palestine with the outside world recorded a decline of 12 percent, with imports recording a decline of 17 percent during 2025 compared to 2023.

It indicated that this decline "reflects the extent of the cumulative damage that has befallen the economy since the start of the Israeli aggression on the West Bank and Gaza Strip, more than two years ago, which led to damage to production capacity and the continuation of bottlenecks in economic activities".

Despite the West Bank recording a limited increase of 4.4 percent in 2025 compared to 2024, the Gross Domestic Product in the Gaza Strip continued to shrink, recording an additional decline of 8.7 percent during the same period, according to the statement.

The statistics indicate that nearly half of the workforce in Palestine is disrupted, with the unemployment rate reaching 46 percent during 2025, with 28 percent in the West Bank and 78 percent in Gaza, with more than 650,000 unemployed.

The forecasts indicate that the Palestinian economy will record a growth of between 4.1-4.5 percent during 2026, indicating the continuation of gradual recovery that began after the sharp contraction recorded in 2024.

This growth is attributed, according to the statement, to a limited improvement in the components of aggregate demand, especially final consumption, supported by the continued flow of humanitarian aid and private transfers, in addition to a partial positive contribution from investment spending.

This comes as the Israeli army and settlers escalate their attacks in the West Bank since the start of the genocide war in Gaza that lasted two years, resulting in the killing of more than 1,102 Palestinians, injuring about 11,000, in addition to arresting more than 21,000.

Meanwhile, the Israeli genocide war in Gaza left about 71,000 Palestinian dead and 171,000 injured, mostly children and women, and massive destruction with a reconstruction cost estimated by the United Nations at about 70 billion dollars.