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69. Recent general trends. The economic and social development of the occupied Palestinian territories has been negatively affected by the political situation in the region and the years of conflict and occupation. Nevertheless, economic development from 1997 to September 2000 was more favourable and gave reason to hope for sustainable improvement of the economic situation. After a period of serious recession between 1994 and 1996, the economy finally achieved positive growth in real terms: the annual growth rate of real gross domestic product (GDP) was estimated by the Palestinian Authoritys Ministry of Finance and the International Monetary Fund (IMF) at 7 per cent in 1998 and 6 per cent in 1999. The corresponding gross national product (GNP) growth rates, which include earnings of Palestinians working in Israel,[12] were estimated at 8 per cent and 7 per cent, respectively. As a result, despite rapid population growth, GDP per capita also increased by 1.7 per cent to US$1,574 in 1999, while GNP per capita rose by 2.6 per cent to US$1,940. The preliminary estimate of GDP per capita for 2000 (i.e. without anticipating the crisis) was US$1,584 and that of GNP US$1,971.[13] This positive economic growth resulted from a combination of several factors. First, the restrictions on the movement of workers and goods, preventing Palestinian workers from reaching their workplaces and impeding any economic activity in the occupied Palestinian territories, were lifted to a certain extent. The number of days lost owing to border closures between Israel and the occupied territories was 121 in 1996, decreasing to 26 in 1998, to 16 in 1999, and from January to September 2000 border crossings were closed for only three days.[14] Second, positive economic growth was based on a strong demand for Palestinian workers in Israel and in the domestic economy, as well as an increase in real wages, resulting in higher domestic consumer demand. There was also some positive development in investment activity during the period: a recovery in residential construction as a result of improved economic conditions and incomes of the population; growth of new company registrations by almost 40 per cent between 1998 and 1999; and an increase in bank credits to businesses, indicating higher confidence of entrepreneurs in future economic prospects.
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