While the bulk of the Arab world is awash with liquidity arising from the burgeoning oil price, Palestine’s economic circumstances are severely straitened. The election of a Hamas government in January 2006 reverberated through international institutions and many have implemented systems to sever links with the new party in power. The local stock exchange has fallen by more than 20% following the election and the Palestinian Authority is facing a cash deficit of at least $110m a month. Gross domestic product (GDP) growth has also declined from a comparatively robust 8% in 2005 to as little as -0.2% in 2006 and a prospective -0.6% in 2007.
Banks are isolated
