The World Bank says the Palestinian economy has worsened for a third consecutive year.

In a report released on Monday, the World Bank cited a number of factors, including reduced donor aid, Israeli restrictions and political instability that has deterred investors.

It also pointed to the failure of donors to follow through on contributions to rebuild the war-battered Gaza Strip, and a continued shortage of construction materials, despite a new international mechanism to bring in goods from Israel.

The report says the economy has been shrinking on a per capita basis since 2013. Unemployment remains high, hitting 60 percent among Gaza youths, and 25 percent of Palestinians live in poverty.

Steen Lau Jorgensen, the World Bank's country director, says the "volatile reality increases anxiety and uncertainty" about the future.