The Palestinian economy is very modest in comparison with that of neighbouring countries. Since 1967, the economy of the PSRAs has been integrated into Israel’s in line with the economic, land and water interests of the Israeli authorities. Policies implemented by the Israeli Government have prevented any independent economic growth in the PSRAs, which have become dependent on Israel for goods and services and a convenient source of Palestinian labour for the Israeli productive sector.

At present, the contribution of the different sectors to gross domestic product (GDP) is as follows: industry (8%); agriculture (35%); building (around 13%); public sector (11%); and other sectors (around 33%).

Per capita gross national product (GNP) in the West Bank and Gaza Strip declined by 38.8% between 1992 and 1996. This decline can be attributed to Israeli closure policies and to the high population growth.

GDP fell by 3.5% during the same period. On the basis of current estimates of economic activity and a population of 2.27 million, the per capita GNP in 1997 will be US$ 1,480.