PMA Announces May Results Of Its Business Cycle Indicator (PMABCI) An Increase in Both The West Bank And In Gaza Strip

The PMA has released the results of the Palestine Indicator for the Business Cycle (PMABCI) on Sunday May 19th, 2013. The overall PMABCI has witnessed an increase in May 2013, it increased from -2.12 during April 2013 to 3.8 in this month, with an increase in both the West Bank (WB) and Gaza Strip (GS). The following figure clarifies a considerable improvement in the WB indicator, as its value increased from -5.4 during April 2013 to 1.93 in May 2013. This indicates continued improvement in the economic conditions in the WB, which is reflected by the upward trend of the PMABCI since November 2012.

GS indicator has also increased, though with a slower pace than in the WB, and reached 1.76 , which is a relative improvement over the previous month. GS still suffers from apparent fluctuations in overall economic performance that are  influenced by several exogenous and endogenous variables, particularly, related to the Israeli siege. The severe economic conditions in GS since June 2007, in addition to the lack of political prospect under the Israeli siege and the continued drift with the WB limit the expectations of economic improvement in the short run.

In general, The PMABCI indicates a relative pick up in the general economic conditions during the first months of 2013 compared to the previous year. Such results are consistent with the available data on these months of 2013, which show improvement in exports, a decrease in the Consumer Price Index, and a rise in government local revenues.

The PMABCI aims at monitoring fluctuations in economic activity, specially the level of production, and employment in the industrial sector, and their repercussions on the Palestinian economy. The PMABCI provides real-time information about the economy, and thus, help the decision maker in making accurate decisions on a timely manner without having to wait for the release of macroeconomic indicators, which are not published in real time.

It is important to note that the maximum value of this indicator is positive 100, while the minimum is minus 100; a positive value indicates favorable economic performance, and the bigger this value, the better the economy. But if the value is negative, then economic performance is worsening the closer it gets to minus 100. On the other hand, a value close to zero indicates that economic performance did not change and is unlikely to do so in the near future.

Source: PMA (2013). PIBC, May 2013.