PSE Palestinian Territories profile

The Palestinian Territories show fragmented governance, with authorities operating separately in the West Bank and Gaza. In the West Bank, the Palestinian Authority has limited sovereignty amid occupation realities and ongoing security coordination with Israel; governance is affected by external constraints, settlement activities, and dependence on external actors. In Gaza, Hamas exercises de facto authority, with internal governance marked by repression of dissent and conflict with rival factions. The absence of durable national institutions, infrequent elections, and disputed legitimacy undermine policy coherence, accountability, and international engagement. The regional and international context constrains diplomacy, borders, refugees, and the future status of Jerusalem, complicating state-building and governance reform.

Colonial history Under Ottoman rule, British Mandate
Former colonizer United Kingdom
Government type Semi-presidential republic
Legal system Civil law system
Political stability Variable, frequently affected by conflict

The economy is constrained by movement and access restrictions, border controls, and permit regimes that impede trade and investment. External financing and humanitarian aid underpin much of the economic activity, making growth volatile and policy choices dependent on donors. Private sector development is hampered by political risk, fragmented markets, and weak institutions. In Gaza, blockade effects suppress imports and exports, limit energy supply, and hamper reconstruction; in the West Bank, settlement fragmentation and land restrictions shape economic geography. Unemployment and underemployment are persistent; productivity is hindered by fragmentation, scarce resources, and inadequate financial inclusion. The economy lacks diversified industries and resilience to shocks, with social costs carried by households and communities.

Currency name Israeli New Shekel
Economic system Mixed economy with significant agricultural and informal sectors
Informal economy presence Significant, especially in trade and services
Key industries Agriculture, Construction, Textiles
Trade orientation Export-oriented, but heavily affected by political issues

Geographic conditions include dense urban zones adjacent to rural areas and fragmented land use. Water resources are contested and heavily managed by external authorities, with aquifer depletion and salinization concerns. Environmental degradation arises from inadequate waste management, limited recycling, and pollution; climate pressures exacerbate water scarcity and agricultural vulnerability. Coastal Gaza faces erosion and habitat loss, while land segmentation and barriers restrict mobility and land use. Cross-border cooperation is essential for environmental management but is inconsistent due to political fragmentation and security restrictions.

Bordering countries Israel, Jordan, Egypt
Climate type Mediterranean
Continent Asia
Environmental Issues Water scarcity, Pollution, Deforestation
Landlocked No
Natural Hazards Earthquakes, Flooding
Natural resources Natural gas, limestone, marble, and agricultural land
Terrain type Hilly, coastal plains, and mountainous regions

A young demographic profile coexists with strained health, education, and social services. Civil liberties and political rights are constrained by security measures and governance practices; freedom of expression and assembly can be restricted. Displacement and housing insecurity persist for refugees and residents in contested areas. Social cohesion is affected by political divisions, inequality, unemployment, and the trauma of recurring violence. Access to quality healthcare, education, and social protection remains uneven across territories and depends on external funding and humanitarian access.

Cultural heritage Rich historical sites, traditional crafts, and cuisine
Driving side Right
Education system type Public and private education systems
Ethnic composition Palestinian Arabs, Jewish Israelis, Others
Family structure Extended families are common; patriarchal systems
Healthcare model Mixed healthcare system (public and private)
Major religions Islam, Christianity
Official languages Arabic, English

Infrastructure faces chronic stress from outages and supply disruptions; electricity availability is unreliable and fuel shortages affect households and services. Water and sanitation systems require rehabilitation; wastewater treatment remains insufficient in many areas. Transportation networks, checkpoints, and restricted crossings hinder movement and commerce. Telecommunications infrastructure exists but digital access is uneven, with a digital divide between urban centers and underserved communities. Public services depend on international aid and donor programs; disaster risk management and climate resilience capacity are underdeveloped, while logistics for aid and reconstruction are shaped by political and security constraints.

Internet censorship level Moderate, varies by political situation
Tech innovation level Developing, with growth in tech startups
Transport system type Road and limited rail networks

Development indicators

Indicator Year Value Rank 5Y Rank Change
Political Stability and Absence of Violence/Terrorism 2023 -1.87 184 -3
Regulatory Quality 2023 -0.279 112 +22
Rule of Law 2023 -0.683 147 +15
Unemployment, total (% of total labor force) 2022 24.4 2 -3
Birth rate, crude (per 1,000 people) 2023 27.1 44 +4
Death rate, crude (per 1,000 people) 2023 7.2 96 -92
Exports of goods and services (% of GDP) 2024 21 110 -54
GDP per capita (current US$) 2024 2,592 140 -2
GDP per capita, PPP (current international US$) 2024 4,371 154 +13
High-technology exports (current US$) 2023 17,759,669 103 -22
Imports of goods and services (% of GDP) 2024 60.3 33 -24
Inflation, consumer prices (annual %) 2024 53.7 3 -111
Life expectancy at birth, total (years) 2023 65.2 188 +93
Mortality rate, under-5 (per 1,000 live births) 2023 26.3 64 -31
Net migration 2024 -23,145 175 +1
Population, total 2024 5,289,152 123 -1
Renewable energy consumption (% of total final energy consumption) 2022 15.4 34 -89
Foreign direct investment, net inflows (% of GDP) 2024 1.18 72 -80
Current account balance (% of GDP) 2024 -21.1 110 -48
Level of water stress: freshwater withdrawal as a proportion of available freshwater resources 2021 47.8 39 -3
Current health expenditure (% of GDP) 2022 9.73 33 0
Domestic general government health expenditure per capita, PPP (current international US$) 2022 252 119 -1
Suicide mortality rate (per 100,000 population) 2021 0.65 174 0
Individuals using the Internet (% of population) 2023 86.6 48 -27
Control of Corruption 2023 -0.676 142 +45
Government Effectiveness 2023 -1.21 178 +22

Demography and Health

As of 2024, the Palestinian Territories are home to about 5.29 million people (population total 5,289,152). A relatively high crude birth rate of 27.1 per 1,000 people in 2023 signals a young population, while the crude death rate of 7.2 per 1,000 and a life expectancy at birth of 65.2 years indicate ongoing health and longevity challenges. The under-5 mortality rate stands at 26.3 per 1,000 live births in 2023, underscoring the continued emphasis on maternal and child health, nutrition, vaccination, and access to quality perinatal care. With a life expectancy below many regional peers, sustained investment in primary health care and preventive services remains essential in the face of economic and governance constraints. Health financing appears moderate, with current health expenditure at 9.73% of GDP (2022) and domestic general government health expenditure per capita (PPP) at 252 international dollars (2022), suggesting a constrained but meaningful health budget that must be allocated efficiently. Internet usage is high (86.6% of the population in 2023), offering avenues for telemedicine and digital health campaigns, while water stress remains a critical determinant of health outcomes, with freshwater withdrawal at 47.8% of available resources (2021). Net migration in 2024 shows a negative balance of -23,145, which can influence labor supply, remittances, and social support structures. Suicide mortality is relatively low at 0.65 per 100,000 (2021), yet ongoing demographic pressures imply continued investment in health systems and social protection to improve outcomes for children and vulnerable groups.

Economy

The economy presents a challenging context marked by modest income levels and substantial macro volatility. GDP per capita (current US$) is 2,592 in 2024, while GDP per capita (PPP) stands at 4,371 in 2024, highlighting a relatively small, price-adjusted standard of living compared with advanced economies. Inflation runs high, at 53.7% in 2024, eroding purchasing power and complicating fiscal planning and household welfare. Unemployment is 24.4% of the labor force in 2022, signaling tight labor markets and limited formal employment opportunities for a young and growing population. External accounts reflect fragility: exports of goods and services are 21.0% of GDP in 2024, while imports are 60.3% of GDP, producing a sizable trade orientation toward imports and heavy external needs. The current account balance is a deficit of 21.1% of GDP in 2024, indicating reliance on external financing or aid to sustain domestic demand. Foreign direct investment net inflows are 1.18% of GDP in 2024, suggesting cautious investor interest but limited scale. The economy shows a nascent high-technology export footprint, with high-technology exports valued at 17,759,669 USD in 2023, signaling potential for growth in knowledge-intensive sectors but still a small contribution to the overall economy. Renewable energy consumption constitutes 15.4% of total final energy consumption in 2022, reflecting efforts to diversify energy sources even as fossil fuels remain significant. Net migration remains negative at -23,145 in 2024, a factor that can constrain the labor pool and domestic demand but might also reflect external opportunities pursued by residents. Overall, macroeconomic volatility, elevated prices, and integration constraints shape a fragile but potentially dynamic landscape for reform and resilience-building.

Trade and Investment

Trade and investment patterns reveal a pronounced dependence on external flows and a need to strengthen diversification. Exports account for 21.0% of GDP in 2024, while imports exceed 60.3% of GDP, indicating a substantial trade deficit and a reliance on imports for goods and services. The current account balance is negative at 21.1% of GDP in 2024, highlighting the ongoing need for external financing or aid to balance demand and investment in an environment of constrained domestic revenue generation. Foreign direct investment net inflows are 1.18% of GDP in 2024, reflecting modest private capital participation and room for improvement in investment climate, governance, and risk management. High-technology exports, at 17,759,669 USD in 2023, point to a small but developing technology-oriented export sector, suggesting potential growth if supported by policy incentives, stable governance, and improved infrastructure. Renewable energy consumption sits at 15.4% of total final energy consumption in 2022, indicating gradual energy diversification that can influence industrial competitiveness and cost structures for exporters and manufacturers. The overall trade and investment picture indicates opportunities for targeted reforms to reduce barriers, improve market access, and attract higher-quality investment while addressing macroeconomic volatility and supply chain constraints.

Governance and Institutions

Governance indicators show notable systemic constraints. Political stability and absence of violence/terrorism are rated at -1.87 in 2023 (rank 184), signaling elevated political risk and vulnerability to shocks. Regulatory quality is -0.279 (rank 112), while the rule of law is -0.683 (rank 147) and control of corruption -0.676 (rank 142). Government effectiveness is -1.21 (rank 178). Taken together, these values point to weak institutional capacity, limited rule of law, governance inefficiencies, and corruption concerns that can hinder public service delivery, investor confidence, and the effectiveness of reforms. Weak governance can amplify the fragility of health, education, and infrastructure programs, impede timely policy responses to crises, and constrain the functionality of public institutions essential for development. Addressing governance gaps—through anti-corruption measures, enhanced accountability, regulatory improvements, and efforts to strengthen public sector effectiveness—could improve service delivery, boost investor trust, and create a more conducive environment for sustainable growth and resilience in the Palestinian Territories.

Infrastructure and Technology

Infrastructure and technology indicators reveal a mix of strong digital connectivity alongside constraints in energy diversification and broader infrastructure resilience. Individuals using the Internet reach 86.6% of the population in 2023, signaling widespread digital access that can enable e-government services, online education, digital finance, and remote work. Renewable energy consumption accounts for 15.4% of total final energy use in 2022, indicating progress toward diversification but underscoring ongoing reliance on conventional energy sources. High-technology exports are present but modest, totaling 17,759,669 USD in 2023, suggesting a nascent technology-export sector with potential for growth in software, electronics, or other knowledge-intensive industries given the right mix of policy support, investment, and stable governance. The combination of strong digital connectivity and emerging tech exports suggests opportunities to expand the digital economy, promote innovation, and improve service delivery, while energy reliability, water resource management, and governance quality remain critical inputs for broader infrastructure development and technology adaptation in daily life and production.

Environment and Sustainability

Environmental and sustainability considerations center on water resources, energy diversification, and climate resilience. Level of water stress shows freshwater withdrawal at 47.8% of available resources in 2021, indicating substantial pressure on water supplies that can affect health, agriculture, and livelihoods, particularly in the context of population growth and climate variability. Renewable energy consumption at 15.4% of total final energy use in 2022 demonstrates steps toward cleaner energy, though the majority of energy remains sourced from non-renewable or traditional supplies. These indicators imply a need for integrated water management, investment in renewable capacity, and policies that align environmental objectives with social and economic development. Building resilience to climate impacts, improving water governance, and expanding sustainable energy infrastructure could yield broad long-term benefits for health, productivity, and living standards in the Palestinian Territories.