Palestine economy shrank in 2014 over Gaza war

The International Monetary Fund (IMF) says the economy of the blockaded Gaza Strip and that of the occupied West Bank contracted in the wake of the Israeli war against the enclave last summer.

“Economic activity contracted in 2014, following the war in Gaza in the summer and mounting political tensions in the West Bank and East Jerusalem (al-Quds),” the IMF said on Thursday.

The IMF further expressed doubts over prospects for a strong Palestinian economic recovery, citing the Tel Aviv regime’s decision to freeze the tax revenues of the Palestinian Authority (PA) in retaliation for the Palestinian application to join the International Criminal Court (ICC) to sue Israel.

On January 3, Israel announced it was freezing the monthly transfer of more than USD 120 million in taxes belonging to the Palestinians after the PA applied to join the ICC.

“These represent about two-thirds of net revenues and are essential to the PA’s budget and to the Palestinian economy,” the IMF said

“Reduced wage payments and other public spending cuts necessitated by the suspension of clearance revenues in the presence of financing constraints will likely cause a sharp reduction in private consumption and investment,” it added.

Nearly 2,200 Palestinians, including 577 children, were killed in the Israeli onslaught on the Gaza Strip that started in early July 2014 and ended in late August that year. Over 11,100 others, including 3,374 children, 2,088 women and 410 elderly people, were also injured.

Some 100,000 people are still homeless in the besieged coastal sliver with the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) cautioning that cutting subsidies to the displaced people, who are now renting alternative accommodation, could force large numbers back to UN schools and centers, which are already home to 12,000 people.