WASHINGTON (AFP) -- The war between Israel and Gaza drove the Palestinian economy of Gaza and the West Bank into its first contraction since 2006, the International Monetary Fund said Thursday.
While the West Bank managed a 4.5 percent expansion last year, Gaza's economic activity declined by about 15 percent, the IMF said, linking it to Israel's harsh bombing and shelling of the coastal enclave and slow progress on rebuilding.
Overall, the contraction amounted to about one percent of gross domestic product.
"Economic activity contracted in 2014, following the war in Gaza in the summer and mounting political tensions in the West Bank and East Jerusalem," the IMF said.
After a mission to assess the state of the economy, the IMF said a strong recovery this year was also in doubt due to Israel's continued refusal to hand over some $127 million worth of clearance revenues due to the Palestinian Authority on goods imported into the West Bank and Gaza.
"These represent about two-thirds of net revenues and are essential to the PA's budget and to the Palestinian economy," it said. more