The main body of the report is organized in two chapters with three supporting annexes. Chapter one focuses on recent economic developments in the real, fiscal and banking sectors, while providing a near term outlook that highlights critical challenges facing the Palestinian economy. Chapter two provides input on a new vision for growth and job creation, with quantification of the potential gains. It contains critical messages for the GoI, the PA and the international donors on steps to create an environment conducive to the needed private sector investment. Annex one assesses the status of the World Bank recommendations to the AHLC meeting over the years, many of which relate to the constraints identified in chapter two. While there are developments, overall progress from the GoI and the PA has been minimal. Annex two provides an update on the disbursement of pledges made at the Cairo conference in October 2014 on reconstructing Gaza. Donor support by mid-July 2017, at 53 percent of Cairo conference pledges, had barely changed from the December 2016 position, and there are limited prospects of further contributions. Most of the gap can be attributed to the larger pledgers at the conference. Finally, annex three provides some methodological notes on the specifications of the CGE model and assumptions used to quantify the external and internal constraints.