Palestine’s inflation rate slowed in the third quarter of 2022 to 3.7 percent year-on-year from 3.9 percent in the second quarter of the year, and the high rate of inflation recorded in the third quarter affected the level of real wages.
Causes of inflation
Palestine continues to experience relatively high inflation rates, mainly influenced by high commodity prices in global markets, particularly food and energy.
In addition to the escalation of inflation rates among trading partners as a result of several factors, foremost of which is the crisis in Ukraine and the crisis in supply chains.
Those events resulted in a clear increase in the cost of imports, and higher prices for the majority of goods in the Palestinian consumer basket, and the Monetary Authority expected that these factors would continue to have an impact in the coming periods.
4th Quarter Forecast
The rate of inflation in the Palestinian economy is forecast to rise during the fourth quarter of 2022 to about 3.9 percent against the backdrop of the expectation of increasing import costs and rising global food prices mainly.
The inflation rate for the entire current year is expected to average 3.7 per cent compared to last year.
Increase the number of employees
The number of Palestinian workers increased significantly in the third quarter, in the three work areas (the West Bank, the Gaza Strip, and the 48 territories), reaching an all-time high of about one million and 154 thousand workers.
The increase in the number of workers was accompanied by an expansion in the number of labour market participants at about the same pace, resulting in an unemployment rate close to its previous level of 24.7 per cent.
Decline in real wages
The real wage rate in the West Bank and Gaza Strip declined by 13.7 per cent and 1.3 per cent respectively, while the increase in real wages for Palestinian workers in the Israeli economy was only 2.5 per cent
The increase in the number of workers has been accompanied by variable wage changes, with nominal wages for workers in the West Bank and the Israeli economy rising, while wages in the Gaza Strip have declined.
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