Last week the International Monetary Fund (IMF) reported that mounting political tensions and the war between Israel and Gaza during the summer drove the combined Palestinian economy of Gaza and the West Bank into its first contraction since 2006. While the West Bank economy actually grew by 4.5 percent in 2014, in Gaza economic activity declined by a staggering 15 percent. The IMF report linked this decline to Israel’s massive bombing and shelling of the coastal enclave during “Operation Protective Edge” and the slow rate of progress in rebuilding. Overall, the contraction of the combined Palestinian economy during 2014 amounted to about one percent of gross domestic product (GDP).

Following a mission to assess the state of the Palestinian economy, the IMF said that a strong recovery this year was also unlikely due to Israel’s continued refusal to hand over some $127 million worth of clearance revenues due to the Palestinian Authority for goods imported into the West Bank and Gaza. The turmoil has caused unemployment to remain very high in both areas: 19 percent in the West Bank and 41 percent in Gaza.