Since the last Ad Hoc Liaison Committee(AHLC) meeting, the PA has continued to strengthen itsinstitutions, delivering public services and promotingreforms that many existing states struggle with. The qualityof its public financial management (PFM) has furtherimproved. Education and health in the West Bank and Gaza(WB&G) are highly developed, comparing favorably to theperformance of countries in the region as well as globally.Ultimately, sustainable economic growth in WB&G can onlybe underpinned by a vibrant private sector. The latter willnot rebound significantly while Israeli restrictions onaccess to natural resources and markets remain in place, andas long as investors are deterred by the increased cost ofbusiness associated with the closure regime. Education andhealth indicators for WB&G are impressive and reflectextensive coverage of the population, but a focus onimproving the quality of these services remains warranted.Similarly, education investments take time to mature. Whilethe PA is already implementing an education sector plan thathighlights the importance of improving the quality ofeducation, the relevance of graduates' skills remainsan area requiring further attention. This report willtherefore reflect on recent growth trends but also on thefuture trade regime and employability of the WB&G labor force.