Palestine Economy Grows 4.7% YoY in Q2

The economy of Palestine expanded by 1.4% year-on-year in the third quarter of 2025, slowing from a 3.2% expansion in the previous three-month period. This marked the fourth consecutive quarter of economic growth, albeit the weakest in the sequence, driven by contractions recorded in wholesale and retail trade (-1.8%), financial and insurance (-2.1%), services (-1.6%), public administration and defense (-4.1%), and transportation and storage (-2.8%). Meanwhile, output expanded in agriculture, forestry, and fishing (7.6%), mining, manufacturing, electricity, and water (15.8%), construction (4.1%), and information and communication (8.2%). On a quarterly basis, the GDP advanced by 1.9% in Q3 2025, following a 1.9% decline in the previous three-month period.

The economy of Palestine expanded by 4.7% year-on-year in the second quarter of 2025, slowing from a 9.1% expansion in the previous three-month period, marking the second consecutive quarter of economic growth. The slowdown was primarily driven by the contraction recorded in agriculture, forestry and fishing (-0.8%), mining and quarrying (-4.2%), and transportation and storage (-3.4%). Meanwhile, output expanded in construction (21.4%), wholesale and retail trade (5.9%), financial and insurance (13.6%), information and communication (6.6%), services (6.4%), and public administration and defense (1.8%). On a quarterly basis, the GDP shrank by 0.5%, following 0.9% decline in the previous three-month period.

The economy of Palestine expanded by 9.1% year-on-year in the first quarter of 2025, recovering from a 1% contraction in the previous three-month period. This marked the first growth in the economy since the third quarter of 2023, driven by increases in nearly all the economic activities, significantly in agriculture, forestry and fishing (26%) and wholesale and retail trade (17.2%). Output also expanded in mining, manufacturing, electricity, and water (7.7%), information and communication (6.1%), financial and insurance (5.4%), services (4.6%), and public administration and defense (1.8%). On the other hand, contraction was recorded in construction (-5.8%). On a quarterly basis, the GDP shrank by 1% in Q1, the first decline in a year, reversing a 1.5% gain in the prior period, due to the ongoing Israeli aggression and a 1.1% decrease in the West Bank economy.