Political and security uncertainties may be easing but the outlook for growth is gloomy. There is an urgent need for scaled up support from financial donors to fill a $600m financing gap.
Economic risk (HIGH): A downgrade in growth forecasts is a reminder of the structural problems facing both West Bank and Gaza.
Political risk (HIGH): The reconciliation between Hamas and Fatah and the interest of the White House in peace talks between the PA and Israel bode well.
Financial risk (HIGH): Further shortfalls in budget support or a failure of the PA to contain spending would weaken an already fragile fiscal position. The link between banks and PA financing is concerning.
Commercial risk (MEDIUM): Businesses has leapt up the World Bank doing business index but firms still face obstacles both from external border restrictions and internal commercial hurdles.