Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Ample opportunities for doing business exist within the Palestinian market in the West Bank and Gaza, despite the unique challenges present. The West Bank economy (defined for the purposes of this guide as Areas A and B under Palestinian Authority (PA) administrative control), in particular, has shown growth in past years before a more recent downturn. Israeli and Egyptian security restrictions following the 2007 Hamas takeover in Gaza have made it very difficult for goods to enter or leave the Gazan market. The economies of the West Bank and Gaza have grown increasingly separate since 2007.
- In 2021, nominal GDP of the West Bank and Gaza was estimated at $18.04 billion, and per capita GDP was $3,409.
- In 2021, the Palestinian population stands at 5.23 million, with 3.12 million in the West Bank and 2.11 million in Gaza, according to the Palestinian Central Bureau of Statistics. Thirty-nine percent of the population is under 14 years.
- Despite relatively low per capita GDP (West Bank and Gaza are rated as a lower middle income country), there is a sizeable middle/upper-middle class in the West Bank. The West Bank and Gaza boast one of the highest per capita rates of university graduates in the Arab world. Palestinians have a long-standing tradition of spending generously on higher education.
- In 2021, Palestinian imports of goods and services were $6.42 billion and exports were $1.46 billion. West Bank and Gaza imports come mainly from Israel, Turkey, and China; while imports from Jordan have also risen in recent years.
- The Palestinian market relies heavily on Israel as a trading partner. In 2021, Palestinian imports from Israel were $3.48 billion and exports were $1.3 billion. Business people in the West Bank are eager to diversify the number and location of their trading partners.
- In 2021, imports from the United States, both direct and indirect, were estimated at $800 million, based on private sector sources.
- The information and communication technology (ICT) sector is a growing area of the Palestinian market, as are cellular and landline telephone services. Palestinian stone and marble exports have remained strong, in particular to the United States. The handicraft market has begun to expand into export markets for a range of products.
- The Palestinian Authority (PA) Government has approved a Competition Law, which will go into force upon approval by the PA Chairman. The World Bank sees the new competition law as a critical reform to improve the business climate by making price fixing and anti-competition practices illegal. This law has the support of much of the Palestinian private sector, especially small and medium-sized businesses and startups, to counter large family-owned or public companies that have monopolies over certain sectors in the Palestinian market.
- International donor investment in basic and social infrastructure in the West Bank and Gaza will continue to present opportunities for U.S. contractors, despite recent declines in overall investment. Between 1994 and 2017, the U.S. Agency for International Development (USAID)/West Bank and Gaza Mission provided more than $5.5 billion in economic assistance to Palestinians living in the West Bank and Gaza. USAID programs were ceased in 2019 but were re-established in 2021.
Top five reasons why U.S. companies should consider exporting to the West Bank and Gaza:
- Duty-free treatment for American imports.
- Market relies on importing 90% of its needs.
- American products are perceived to be of high quality.
- Small but growing market population growing at an estimated 3% per year.
- Ease of getting paid through an efficient banking sector.