Pandemic COVID-19 and Macroeconomic Indicators: A Study of the Structural Factors Exacerbating Palestine's Economic Crisis

Abstract

This paper explored and examined the impact of the (COVID-19) pandemic for the following period from March 2020 to February 2022 on selected macroeconomic indicators and variables in Palestine, as well as its economic impact and structural factors that exacerbate the coronavirus (COVID-19) pandemic issue, are examined in this paper. This study uses data from the Palestine Monetary Authority (PMA) and the World Bank to assess the link between the exchange rate, crude oil price, inflation, and economic growth in Palestine using Johansen-Juselius multivariate cointegration techniques. The findings show that a combination of falling oil prices, high inflation, exchange rate, and spillovers from the (COVID-19) pandemic outbreak triggered the economic downturn in Palestine, which not only reduced demand for oil products but also halted economic activity when social distancing policies were implemented. The government responded to the situation by assisting companies and a limited number of homes afflicted by the coronavirus (COVID-19) pandemic. As a result, the report recommends that the government invest inadequate digital infrastructure to ease the shift from face-to-face business operations to "digital or online" business activities, which can assist the digital economy to expand.