COMCEC Trade Outlook 2019
13
Major hindrances from the Israeli side seriously impede the realization of Palestine’s true trade
potential especially its export potential. As a result, Palestine suffers a huge trade deficit. The
Israeli closure and blockade have significantly hampered the Palestinian exports and caused
economic dependence to Israel.
Palestine's trade deficit widened to USD 414 million in April 2019 from USD 382 million in the
same month of the previous year.
This was the largest trade gap since January, as imports rose while exports fell. Imports
increased 7 percent to USD 504.7 million, with purchases from Israel accounting for 58 percent
of total imports. Meantime, exports declined 1 percent to USD 90.7 million. Sales to Israel
represented 87 percent of total exports. Considering the first four months of the year, the trade
deficit widened to USD 1.57 billion from USD 1.47 billion in the same period of 2018. Balance of
Trade in Palestine averaged -257.98 USDMillion from2001 until 2019, reaching an all time high
of -66.79 USD Million in April of 2002 and a record low of -429.10 USD million in March of
201112.
Therefore, such impediments cause substantial damages to the Palestinian trade and need to be
alleviated.
Figure 12: Share of OIC in Global Trade
Source: IMF Direction of Trade Statistics
Figure 13 below demonstrates evolution of the value
versus volume (i.e. eliminating the effects of prices and
exchange rates) developments in total OIC and world
exports. In value terms (i.e. in USD), OIC exports yielded
higher growth rates than that of world exports which was
more prominent during the oil price boom period between
2003 and 2012. Total OIC exports move closely with oil
prices due to heavy dominance of oil in OIC exports. As a result, OIC exports in USD have been
on a declining trend mainly due to the recent slump in oil prices over the last four years. On the
other hand total OIC exports in volume terms (i.e eliminating the effects of prices and exchange
rates) which increased by 0.86 per cent in 2017 increased further by 0.84 per cent in 2018. The
1
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
per cent
OIC Exports / World Exports OIC Imports / World Imports
“Most of the increase in
total OIC exports was
driven by rising export
prices in 2017 and 2018”