World Bank: Palestinian economy to shrink in 2014

RAMALLAH, West Bank (AP) — The World Bank says the Palestinian economy is expected to shrink by 4 percent in 2014 after seven years of largely aid-driven growth.

The bank said in a report Tuesday that the slump was caused by the recent war in the Gaza Strip, continued Israeli and Egyptian movement and trade restrictions, particularly in Gaza, and a drop in foreign aid.

The bank says Gaza entered a recession, with an anticipated 2014 downturn of 15 percent, while the West Bank economy is seen stagnating at 0.5 percent annual growth.

The bank called for lifting restrictions on Palestinians and said a unified government must run the Palestinian territories.

Steen Lau Jorgensen, the bank's top official in the region, told The Associated Press that the bleak results are "a wake-up call to everyone."