GAZA CITY, Gaza Strip — Banks operating in the Gaza Strip have been reducing the volume of facilities provided to the private sector in light of the deterioration of the economic situation.
On May 15, the Palestine Monetary Authority (PMA) released data showing that the total loans and facilities provided by banks operating in the Palestinian market to their customers in Gaza dropped by 3.2% in March compared to the same period in 2018.
The economy in the Gaza Strip has been struggling amid the ongoing Israeli blockade and the tense political relationship between Gaza and the West Bank. Since March 2017, the Palestinian Authority (PA) has imposed sanctions on Gaza by reducing payments of the salaries of its public employees in Gaza with 30% to 50%. The crisis climaxed with Israel cutting the Palestinian tax revenues allocated to the families of victims killed in confrontations with Israel and Palestinians in Israeli prisons. So far, the PA has refused to receive any reduced tax revenues.
Al-Monitor contacted PMA Gov. Azzam al-Shawwa who attributed the fluctuation in the available bank facilities to the deflation in economic activity in the enclave. He said, “The reduction in the facilities provided in the Gaza Strip has a negative impact on the capital turnover as well as on economic growth as it reduces market liquidity and affects trade movement.”
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