The Palestinian economy is slowing in 2018 and is not improving by 2019

The real growth rate fell significantly to 0.6 percent in 2018 compared to 3.1 percent a year earlier, due to the repercussions of the US embassy's transfer to Jerusalem, the reduction of foreign aid, the effects of the Israeli blockade on Gaza, and the settlement policy, the PMA said in its economic growth estimates.

The Monetary Authority said in a statement that the slowdown is due to a series of challenges, the most prominent of which is "the increasing uncertainty and pessimism caused by the absence of any economic and political horizon, especially in light of the tension that accompanied the decision to move the US embassy to Jerusalem."

At the end of last year, US President Donald Trump ordered the transfer of the US Embassy in Israel from Tel Aviv to Jerusalem and opened the new embassy in May.

The Monetary Authority attributed the decline in growth also to the shrinking of grants and foreign aid and the consequent decline in government spending, as well as the confiscation of land and settlement expansion in the West Bank and the continued siege and partial closure of trade crossings and political tensions in the Gaza Strip.

"The impact of these challenges will extend to the prospects of the economy in 2019," said Azzam Shawa, the governor of the Monetary Authority.

"As the political and economic landscape continues, economic activity is not expected to be better than it was in 2018 and real growth will be around 0.9%," he said.

Trump suspended the funding of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), resulting in a $ 200 million deficit.

International aid has dropped dramatically, from $ 2 billion in 2008 to $ 720 million in 2017.

The Monetary Authority also predicted that "unemployment rates will continue to rise to reach 31.3% of the total labor force."

The UN agency for trade and development (UNCTAD) said last September that the unemployment rate in the Palestinian territories was 27.4% in 2017, the highest in the world. Half of Palestinians under 30 are unemployed.