Business Cycle Index Up, says Monetary Authority

RAMALLAH, January 18, 2015 (WAFA) – The overall Palestinian Monetary Authority’s Business Cycle Index (PMABCI) witnessed a relative improvement from -0.3 points in December to around 3.9 points in January, according to a press release by the PMA.


It said the improvement was due to the increase in demand in both the West Bank (WB) and the Gaza Strip (GS). Similarly, the index also indicates improvement compared with the corresponding month of 2014, when it reached -3.3 points.


In the WB, the business cycle index went up from around -1.9 points in December to around 4.5 this month due to improvements in textile and food sub-sectors, which account together for more than one third of the total employment in industry.


The textile sub-sector index also increased to around 6.3 points compared to 1.3 points, while the food sub-sector increased to 3.1 points compared to 2.0 points, during the period in compassion.


This increase in both sub-sectors, the PMA says, may be attributed to some seasonal factors, such as the preparations for winter weather in terms of clothing and food and hence an increase in aggregate demand.


Data also revealed an increase in other sub-sectors, with the exception of a slight decline in furniture, paper and engineering sub-sectors, due to a rise in both current demand levels and expected production, accompanied with cautious optimism regarding the near future.


In GS, the index has recovered from -6.0 points during December, to around -3.0 points this month, as a result of improvements in most sub-sectors. Despite the decline in construction for the second consecutive month as a result of Israel barring the entry of needed building materials in sufficient amounts, improvements in other sub-sectors managed to compensate.


The highest increase was in the food industry, which employs around one third of Gaza’s workers, where its index continued to recover from 2.3 points in December to around 6.9 this month.


This recovery could be also ascribed to some seasonal factors related to the winter weather.


However, pessimism about the near future has expectedly increased again in GS as a result of the delay in fulfilling commitments towards reconstructing Gaza, lifting the blockade, and opening Rafah Crossing border, according to PMA.