The results of the Palestinian Monetary Authority's monthly business index, which measures the performance of seven major business sectors, showed a drop in the overall index, from 1.7 points in May to -4. .7 points in June (compared to -14.9 points in June 2021). For its part, the preliminary results of the balance of payments in the first quarter of 2022 indicate a continuous deficit in the current account (goods, services, income and current transfers), which amounted to $623 million.
In the West Bank, the overall index fell from 4.1 points in May to -1.2 points in June. The main sectors that contributed to the drop in the index were construction (from 2.9 to -2.4), trade (from -1.3 to -2.4) and the technology index (from 0.5 to -0.2).
On the other hand, the agricultural sector index increased (from -0.9 to 0.0), followed by the manufacturing index (from 1.6 to 2.1), as well as the transport and storage (from 0.6 to 1.1). At the same time, the renewable energy index remained relatively stable around 0.6 points.
In general, business owners in the West Bank reported declining production levels and inventories. In addition, their expectations were negative for production and employment levels for the next three months.
As for the Gaza Strip, the index fell from -10.4 points in May to -22.6 points in June. Consequently, most of the sub-indices decreased during this period, with the exception of the renewable energy index, which increased (from 0.0 to 1.1).
This decline includes the agricultural sector index (from 1.2 to -4.8), the manufacturing index (from 0.4 to -2.7), the trade index (from -3.3 to – 5.7) and the transport and storage index (from 1.5 to 0.0). On the other hand, the communications and construction technology indices stabilized around -0.3 points and -10.1 points, respectively.
Business owners in the Gaza Strip reported lower levels of production and sales that led to lower inventory levels. Moreover, their expectations were negative about production and employment levels for the next three months.
What is the Balance of Payments situation?
The Palestinian Central Bureau of Statistics (PCBS) and the Palestinian Monetary Authority (PMA) have announced preliminary balance of payments results for the first quarter of 2022 under the joint issuance round.
Preliminary results for the balance of payments in the first quarter of 2022 indicated a continuing current account deficit (goods, services, income and current transfers), which amounted to $623 million. This is due to the deficit of $1,810 million in the trade balance of basic products, as well as the deficit of $347 million in the balance of services.
In contrast, the income account (employee compensation, investment income) recorded a surplus of $987M during the first quarter of 2022. Workers’ compensation in Israel of $952M was the main reason for the income account. surplus income.
Preliminary balance of payments results also indicated a capital and financial account surplus of $514m, due to the financial account surplus of $411m, while the reserve assets of the monetary authority Palestinians recorded a decrease of $9 million in the quarter compared to an increase of $79 million in the previous quarter.
Source : Embassy of France in Lebanon