Palestinians struggle to keep up with price increases

While the Palestinian Authority government insists this wave of price increases is temporary, analysts warn that if prices continue to rise, it will lead to inflation and more street demonstrations.

 Palestinians take part in a protest against rising prices in Hebron, in the West Bank, February 6, 2022.  (photo credit: REUTERS/MUSSA QAWASMA)
Palestinians take part in a protest against rising prices in Hebron, in the West Bank, February 6, 2022.
(photo credit: REUTERS/MUSSA QAWASMA)

There’s been an outcry in the Palestinian territories over a sharp surge in prices. In Hebron, in the southern West Bank, thousands of demonstrators are calling for the government to intervene. 

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Price hikes are affecting everything from rice and flour to dairy products and cooking oil.

While the Palestinian Authority government insists this wave of price increases is temporary, analysts warn that if prices continue to rise, it will lead to inflation and more street demonstrations.

At Ramallah’s main produce market, sellers complain that business is down and people are reluctant to spend money.

Normally the market is full of people but today it appears empty.

Ramallah resident Nihad Sheikh told The Media Line that his $900 monthly salary hasn’t increased in years, and it’s not enough anymore.

“I used to come to the produce market and spend about $60, which would suffice me for a week. Now I need twice that, and it is not enough; I don’t get everything I need.”

The pandemic and soaring inflation have forced wholesalers to increase the price of goods amid accusations from the public that they are making stellar profits.

“They don’t need to increase prices like this! I understand they need to make a profit, but this is insane,” says Sheikh.

And the spike in prices didn’t stop at food staples; at the pump, prices soared above $8 dollars a gallon, burning a hole in drivers’ pockets.

“I work 12 hours a day driving and barely breaking even. It’s not worth leaving home for this,” says Moath Hamarsheh, who drives a seven-passenger microbus between the northern West Bank city of Jenin and Ramallah, near Jerusalem. 

Daoud Bitar, general manager of the Felfela supermarket chain in Ramallah told The Media Line that sales at his stores had dropped by 40% and that the prices of some products had risen by as much as 15%, forcing people to change their purchasing habits.

“Instead of buying things for a month, people are only buying enough for their daily consumption. We are experiencing an economic recession. People are afraid of rising prices. There is a state of instability, which in turn affects the buying habits of customers.”

Economic analyst Thabit Abo Al Ros attributes the price hikes largely to the COVID-19 pandemic. He told The Media Line that a disruption of the supply chain had caused shortages and low inventories of many goods.

“The high cost of the supply chain is a result of the coronavirus crisis, as the cost of shipping increased 800% compared to two years ago.”

He warns that the Palestinian economy is at risk of witnessing its biggest inflation surge in decades.

“The increase in prices will lead to financial inflation from 6 to 7%. The average salary of a government employee is less than $600. He was able to meet the needs of his household maybe before; he will not be able to do that today,” says Abo Al Ros. 

Maha Masri, pushing a half-empty shopping cart at one of Nablus’s grocery stores, told The Media Line that with her family’s income cut in half, she had to be careful with her spending.

“I lost my job at the outset of the pandemic, and my husband’s salary isn’t enough. We are a family of five and my children have needs.”

Palestinian shoppers saw prices for meats like lamb and beef soar over the past year by as much as $5 per kilo.

Palestinians have also seen their overall purchasing power diminish dramatically over the course of the pandemic. 

Masri says she and her husband worry about how they will pay their bills, rent, and food in the future.

Her husband is a teacher earning NIS 3,500 (about $940) per month, and he hasn’t received his full salary in more than two years. The Palestinian Authority is facing a financial crisis of its own due to dwindling aid from donor countries, which forced it to pay only 80% of its employees’ salaries, and at times, only 50%.

At the popular Abu Samaha falafel restaurant, employee Bassam Issa Abu Samaha says the cost of ingredients has skyrocketed lately.

“The price of oil increased by 40%. Plates and cups, not less than 20%. Hummus, which is a main ingredient, rose by nearly 40%.”

He says this will force him to do something that has not happened since the restaurant opened nearly two decades ago.

“I will have to pass it on to the consumer. This is a popular Palestinian dish; everyone should be able to buy it,” says Abu Samaha.