IMF Calls for Action in Gaza, West Bank Amid Slowing Growth

March 14 (Bloomberg) -- The International Monetary Fund called on Israel and the Palestinian Authority to help support the economy of Gaza and the West Bank, where growth has been slowing and unemployment is rising.

“The economy is hobbled by persistent restrictions and increasing political uncertainty,” IMF staff said in a report released today. “Urgent actions are needed -- by the Palestinian Authority, by the government of Israel and by donors -- to stabilize the fiscal position and rekindle economic growth over time.”

The Washington-based IMF sees growth of 5 percent this year in the Palestinian territories, compared with 6 percent last year and an average of about 11 percent in 2010-2011. It expects a “continuing downward trend in subsequent years.”

The Palestinian Authority needs to rein in its budget deficit with caps on spending commitments, according to the report, which also sees as “essential” an easing of Israeli restrictions on external trade, and the movement of goods and people in the region.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net