World

World Bank: Palestinian economy to shrink 4 percent in 2014, after several years of growth

  • FILE - In this Tuesday, Aug. 26, 2014 file photo, a Palestinian family looks from a window at the rubble of the collapsed 15-story Basha Tower following early morning Israeli airstrikes in Gaza City. The Palestinian economy is expected to contract for the first time in seven years in 2014, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. (AP Photo/Khalil Hamra, File)

    FILE - In this Tuesday, Aug. 26, 2014 file photo, a Palestinian family looks from a window at the rubble of the collapsed 15-story Basha Tower following early morning Israeli airstrikes in Gaza City. The Palestinian economy is expected to contract for the first time in seven years in 2014, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. (AP Photo/Khalil Hamra, File)  (The Associated Press)

  • File - In this Thursday, April 24, 2014. file photo, Palestinian farmers harvest  wheat on a farm near the West Bank city of Jenin. The Palestinian economy is expected to contract for the first time in seven years in 2014, shrinking by 4 percent, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. The bank issued the report ahead of a meeting next week of donor nations to the Palestinians on the sidelines of the U.N. General Assembly. (AP Photo/Mohammed Ballas, File)

    File - In this Thursday, April 24, 2014. file photo, Palestinian farmers harvest wheat on a farm near the West Bank city of Jenin. The Palestinian economy is expected to contract for the first time in seven years in 2014, shrinking by 4 percent, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. The bank issued the report ahead of a meeting next week of donor nations to the Palestinians on the sidelines of the U.N. General Assembly. (AP Photo/Mohammed Ballas, File)  (The Associated Press)

  • FILE - In this Wednesday, July 13, 2011 file photo, a Palestinian worker in a family owned workshop that makes checkered head scarves, or keffiyehs, works a loom, in the West Bank city of Hebron. The Palestinian economy is expected to contract for the first time in seven years in 2014, shrinking by 4 percent, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. The bank issued the report ahead of a meeting next week of donor nations to the Palestinians on the sidelines of the U.N. General Assembly. (AP Photo/Bernat Armangue, File)

    FILE - In this Wednesday, July 13, 2011 file photo, a Palestinian worker in a family owned workshop that makes checkered head scarves, or keffiyehs, works a loom, in the West Bank city of Hebron. The Palestinian economy is expected to contract for the first time in seven years in 2014, shrinking by 4 percent, the result of the recent Gaza war, continued Israeli and Egyptian restrictions on Palestinian trade and a drop in foreign aid, the World Bank said Tuesday. The bank issued the report ahead of a meeting next week of donor nations to the Palestinians on the sidelines of the U.N. General Assembly. (AP Photo/Bernat Armangue, File)  (The Associated Press)

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."