15.2 GDP of Palestine and its Sectorial Makeup
The Palestinian economy is characterized by various sectors, including:
Predominant Sectors: The sectors that typically dominate the Palestinian GDP may include agriculture, services, and potentially, construction.
Not So Predominant Sectors: Sectors like manufacturing and mining may have a lesser share in the GDP (Kanafani & Taghdisi, 2012).
The total GDP of Palestine: In 2022, Palestine’s GDP, or gross domestic product, was estimated by the World Bank to be worth 19.11 billion US dollars. The GDP of Palestine represents 0.01% of the world economy.
Figure 1: Palestine GDP
Primary Industry Share: The primary industry sector, comprising agriculture, fishing, and mining, contributes 5.5% to total GDP in 2014. The agricultural sector contributed 249.40 USD million to Palestine’s GDP in the second quarter of 2023, up from 203.20 USD million in the first. Palestine’s agricultural GDP reached a record high of 334.90 USD million in the fourth quarter of 2006 and a record low of 79.30 USD million in the third quarter of 2002. Between 2000 and 2023, the agricultural GDP of the nation averaged 227.94 USD million.
Secondary Industry Share: The secondary industry sector, which includes manufacturing and construction contribute 23.4% in 2017. GDP from Construction in Palestine decreased to 163.50 USD Million in the second quarter of 2023 from 174.30 USD Million in the first quarter of 2023.Between 2000 and 2023, the GDP of construction in Palestine averaged 147.91 USD million; it peaked in the second quarter of 2013 at 300.80 USD million and fell to a record low of 21.80 USD million in the same period in 2002. From 385.40 USD million in the first quarter of 2023 to 402.30 USD million in the second, Palestine’s manufacturing GDP increased. Palestine’s manufacturing GDP averaged USD million 310.07 million between 2000 and 2023. It peaked in the third quarter of 2018 at 463.40 USD million, and it fell as low as 140.50 USD million in the second quarter of 2002.
Tertiary Industry Share: The tertiary industry sector, which covers services such as tourism, finance, and education contribute 71.1% in 2014. From 799.40 USD million in the first quarter of 2023 to 803 USD million in the second, Palestine’s GDP grew significantly due to services. Palestine’s services-based GDP averaged 577.98 USD million between 2000 and 2023. In the first quarter of 2020, it reached its highest point of 829.10 USD million, while in the same period in 2002, it reached its lowest point of 333.00 USD million.
GDP Growth Rate – YOY
In the second quarter of 2023, Palestine’s economy grew by 3% year over year, maintaining the same pace as the previous quarter. Construction (4.1% vs. 4.4% in Q1), wholesale and retail trade, auto and motorcycle repair (18.3% vs. 18.7%), transportation and storage (1.5% vs. 1.6%), and services (20.2% vs. 20.3%) all saw slower growth. In contrast, output increased in the following sectors: financial & insurance activities (5% vs 4.9%), agriculture, forestry, and fishing (6.3% vs 5.2%), public administration & defense (11.8% vs. 11.3%), mining, manufacturing, electricity & water (11.8% vs. 11.5%), and information & communication (3.2% vs. 3.1%). The GDP increased by 1% on a quarterly basis, mostly due to increases in agriculture, forestry, and fishing (23%), which reversed a 2% decline in Q1.
Figure 2: Palestine GDP Annual Growth Rate
Primary Industry growth rate: The growth rate in the primary industry varies, influenced by agriculture and mining performance.
Secondary Industry growth rate: The secondary industry’s growth rate fluctuates, driven by manufacturing and construction trends.
Tertiary Industry growth rate: The tertiary industry typically experiences more stable growth, particularly in the services sector.