The Palestinian Authority is on the brink of financial collapse

The Palestinian Authority is on the brink of “financial collapse,” the World Bank said Friday, blaming the suspension of tax transfers collected by Israel and the conflict between Tel Aviv and the Islamic Resistance Movement (Hamas).

In a report on the impact of the ongoing conflict on the Palestinian economy, marked by the Israeli military offensive on the Gaza Strip that lasted more than seven months, the institution also highlighted a “massive decline” in activity among the reasons cited. economy in the midst of fighting following the Hamas attacks on October 7, 2023.

The World Bank said the situation in the Palestinian Authority has deteriorated “dramatically” over the past three months, “increasing the risk of financial collapse.”

“Revenue streams have dried up largely due to a sharp decline in income transfers payable to the Palestinian Authority and a massive decline in economic activity,” the document emphasizes, noting that “the growing gap between revenue received and the amount needed to finance basic government expenditures is causing financial crisis”.

Thus, the World Bank clarified that “at the end of 2023, the financial deficit reached $682 million (about 630 million euros)” and added that “the deficit is expected to double in the coming months, reaching $1.2 billion (about 1.107 billion euros).” . Euro)”.

“Increasing external aid and accumulating new debt to government officials and suppliers are the only financing options available to the Palestinian Authority,” the World Bank said.

According to the organization, “nearly half a million jobs have been lost in the Palestinian economy since October 2023,” including about 200,000 in Gaza and 144,000 in the West Bank.

The same data also includes approximately 148,000 workers living in the West Bank and East Jerusalem who worked in the Israeli labor market.

“The global poverty rate among Palestinians stood at 32.8% in mid-2023,” up 3.7% from 2017, the World Bank highlighted, before pointing to “huge disparities” between the West Bank and Gaza Strip.

In the Gaza Strip, where “almost all residents now live in poverty,” the percentage was 64%, compared with 12% in the West Bank.

The World Bank further explained that gross domestic product (GDP) per capita in 2023 was $3,360 (about €3,100), down 12% from the previous year, especially in the Gaza Strip, where the decline was 28%. %.

“The per capita income in the Gaza Strip was about a fifth of that in the West Bank. In 2023, real per capita income in the Gaza Strip was the lowest on record,” the organization emphasized, noting that the Palestinian economy “continues to experience a massive shock in the early months of 2024.”

“While the outlook for 2024 remains highly uncertain, a further economic contraction of 6.5–9.6% is expected,” the organization said, amid international concern about the serious humanitarian crisis in the Gaza Strip and growing instability and deteriorating conditions life for the population. Palestinians in the West Bank and East Jerusalem.

The ongoing conflict in the Gaza Strip was sparked by an attack on Israeli soil by the Islamist group Hamas on October 7, 2023, which killed approximately 1,200 people and captured two hundred hostages, according to Israeli authorities.

Since then, Israel has launched an offensive in the Gaza Strip that has killed more than 35,000 people, according to Hamas, which has ruled the small Palestinian enclave since 2007. There are also records of more than 515 Palestinians killed in the West Bank and East. Jerusalem.