RAMALLAH, December 21, 2025 (WAFA) — The Palestinian economy continued to experience a deep and prolonged recession throughout 2025, despite a calculated growth rate of four percent compared with 2024, according to a joint statement issued by the Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority on economic performance in 2025 and forecasts for 2026.
The statement said gross domestic product declined by 24 percent compared with its level in 2023, reflecting the cumulative damage inflicted on the economy since the start of the Israeli aggression on the West Bank and the Gaza Strip. This decline has severely undermined productive capacity and prolonged disruptions across economic activities.
GDP recorded a sharp contraction of 84 percent in the Gaza Strip in 2025 compared with 2023, while the West Bank saw a decline of 13 percent over the same period. Although the West Bank registered a limited increase of 4.4 percent in 2025 compared with 2024, Gaza’s economy continued to shrink, posting an additional decline of 8.7 percent.
The limited growth recorded in 2025 was attributed to modest improvements in some productive sectors and a partial resumption of commercial activity compared with 2024. However, GDP levels remain far below those recorded before the aggression, confirming that the Palestinian economy has yet to regain its productive capacity and that recovery remains fragile and constrained by ongoing restrictions and economic collapse in the Gaza Strip.
The statement noted that the Palestinian economy is largely service-based, with services accounting for about 60 percent of economic activity, while productive sectors contribute only around 19 percent. This structure makes the economy highly vulnerable to shocks, with most economic activities in 2025 still significantly below their 2023 levels.
The construction sector recorded the steepest decline at 41 percent, including a 29 percent drop in the West Bank and a near-total collapse of 99 percent in Gaza, with its value falling to 296 million US dollars. Industrial activity declined by 25 percent, services by 25 percent, and agriculture by 18 percent, with particularly severe contractions in the Gaza Strip across all sectors.
Trade between Palestine and the rest of the world fell by 12 percent in 2025 compared with 2023. Imports declined by 17 percent to $7.88 billion, while exports of goods and services rose by five percent to 2.86 billion dollars, mainly driven by the West Bank. The data showed a widening trade deficit, as imports remain nearly three times the value of exports.
The report said Gaza's share of external trade dropped to less than four percent due to the near-total disruption of supply chains, contributing to a severe health and food crisis caused by acute shortages of essential goods, medicines, and food supplies.
Unemployment remained extremely high in 2025, with the overall rate reaching 46 percent, including 28 percent in the West Bank and more than 77 percent in the Gaza Strip. More than 650,000 people were unemployed, reflecting continued labor market distress despite slight improvements compared with 2024.
Living conditions continued to deteriorate, with total consumption falling by 24 percent in 2025 compared with 2023. The statement said conditions in Gaza have moved beyond conventional poverty levels toward widespread food insecurity.
Prices across Palestine rose by around 11 percent in 2025 compared with 2024, driven by a sharp increase of about 22 percent in the Gaza Strip, while prices in the West Bank recorded a slight decline.
Looking ahead to 2026, the Central Bureau of Statistics and the Monetary Authority said economic forecasts point to only marginal growth under difficult conditions, with future performance dependent on political developments, easing of restrictions, and broader regional factors.
M.N
