Explore Palestine

Export-Led Prosperity

In order to better integrate Palestine into the global economy, it has been recognized that increasing exports is a driver of improved socio-economic development.  The Palestinian National export strategy has identified nine key export sectors that includes agro-processed meat, footwear and leather, fresh fruits, vegetables and herbs, furniture, information and communications technology, olive oil, stone and marble, textiles and garments, and the tourism sector.

Improving these sectors could lead into further transformation of the Palestinian economy by improving competitiveness in the global market, leading to larger economic independence and better livelihoods for the Palestinians.

Palestine Export Performance 2019

Palestinian export growth and contribution has been relatively consistent, whereas during 2019, GDP increased by 0.9% compared to 2018 at constant prices. Thus, the Palestinian economy maintained stability growth rate in spite of the financial crisis that witnessed a withholding for clearance revenues for more than 6 consecutive months, (increase of 1.2% in the West Bank and stability in Gaza Strip in 2019 compared to 2018).

Contribution of exports to GDP has not changed much from 2007 to 2019 with export contributing on average 7% each year. In 2017, exports reached peak GDP contribution 8%, and then declined to reach 7% in both 2018 and 2019 (See Table 1 -Palestinian Export Contribution to GDP).

Estimates at constant prices showed an increase of 2.6% in Palestine during the 4th quarter 2019 compared to the 3rd quarter 2019 at constant prices, (mainly in Agriculture and fishing by 12%, Mining, Manufacturing, Electricity and Water 2%, Wholesale and Retail Trade and Repair of Motor Vehicles and Motorcycles by 2%, Public Administration and Defense by 5%). (See Table 2 - Palestine Export and Import Values).

The statistical data indicate that the growth in Palestinian exports declined in the year 2019 and the value of imports decreased, according to the data of the Palestinian Central Bureau of Statistics. As a result, total export registered 1068 USD million which means exports declined slightly by 7.5% in 2018 from previous year, and also the value of imports decreased by 11.6% during the same period

Palestinian exports are still confined to its geographical focus, as Israel represented 84% of the total Palestinian exports in 2018.  As for the Palestinian imports from or through Israel, they constituted around 55% of the total Palestinian imports during the year 2018 (See Table 3 - Export Indicators).

Table 1:  Palestinian Export Contribution to GDP (2007-2019)

Source:  PCBS

Table 2: Palestine: Export and Import Values - USD Millions (2003-2019)

Source: PCBS

Table 3: Export Indicators - USD Million (2015-2019)

Source: PCBS

Trade Balance

Palestine suffers from a large deficit in the trade balance. This deficiency is due to its heavy dependence on imports. The Palestinian market differs from other markets, as it is a small market that follows a number of restrictions and is governed by a set of obstacles in addition to that it does not control its borders, so we find that the Industrial base in the Palestinian market cannot keep pace with global developments unlike other countries.

The deficit in the merchandise trade balance for the year 2019 decreased by 12.5% ​​compared to 2018 and reached 4,708 million US dollars in 2019. This decrease in the value of the trade balance deficit is due to a significant decrease in the value of total imports of goods from 6,539 million US dollars in 2018 To 5,776 million US dollars in 2019, compared to a slight decrease in the value of total exports from 1,155 million US dollars in 2018 to 1,068 million US dollars in 2019. As is evident from the figure below (see Table 4 – Palestine Trade Balance), the trade balance deficit increased significantly during the period 2012-2019 as a result of the increase in the value of imports over the value of exports.

Table 4:  Palestine Trade Balance - USD Million (2006 – 2019)

Source: PCBS

Geographical Distribution for Foreign Trade

Israel is still considered the largest trading partner of the State of Palestine, as imports from Israel 55% of total imports, followed by the European Union (EU28) by 13%, then Turkey by 10%, then China by 6%, as the total value of imports increased by 11.7% from 2017, while imports from Mercosur increased by 33% between 2017- 2018, followed by imports from GAFTA, which increased by 19%.

The geographical distribution of Palestinian imports between 2012-2018 (see Table 5 – Geographical Distribution of Imports), it becomes clear that the value of imports in general has increased from 5.8 billion US dollars in 2017 to 6.5 billion US dollars in 2018. This means that Palestinian imports have reached a new peak since 2014, when import peaked at $ 5.6 billion.

Table 5:  Geographical Distribution of Imports - USD Thousands

(2012-2018)       

The geographical distribution of Palestinian exports between 2012-2018, Palestinian exports increased slightly from 1065 USD million in 2017 to 1155 USD million in 2018, where the growth rate of exports between the two years represented 8.4% (see Table 6 – Geographical Distribution of Exports). Although the Israeli market is still the primary destination for Palestinian exports, as the percentage of exports to the Israeli market represented 84% in 2018, while Palestine's exports to GAFTA countries represented 12% and the European Union represented no more than 1% of the total Palestinian exports.

Table 6: Geographical Distribution of Exports – USD Thousands (2012-2018)

Export Structure in Terms of Products for 2018

The State of Palestine has maintained the highest levels of Palestinian stone exports to global markets during the past years, as the share of stone exports exceeded 16% of the total volume of Palestinian exports in 2018. The table below shows the share of a group of the largest Palestinian exports in 2018, which constitute 61.8% of total Palestinian exports, noting that the value of exports in 2018 was 1,155 million US dollars (see Table 7 – Palestinian Product Export Share).

Table 7:  Palestinian Product Export Share (2018)