The Palestinian economy is expected to continue operating well below its potential. Growth is projected to hover around 3 percent and given population growth trends, income per capita is thus expected to stagnate, negatively impacting living standards.
Despite some signs of recovery, the Palestinian economy has not yet rebounded to its pre-pandemic level. The ongoing restrictions on movement and access, the long-term effects of fiscal distress, combined with a rapid increase in prices are contributing to a slower economic recovery.
Despite signs of recovery after the easing of COVID-related measures, the fiscal situation remains highly challenging due to the accumulation of large arrears and very low aid.