Fri 24 May 2024 5:23 pm - Jerusalem Time

World Bank: The Palestinian Authority faces the risk of financial collapse

The World Bank warned - in a report issued today, Friday - that the Palestinian Authority faces the risk of a “collapse in public finances” with “depletion of revenue flows” and a significant decline in economic activity, against the backdrop of the ongoing war on the Gaza Strip, since October 2023.

The report - a copy of which was seen by Al Jazeera Net - stated that "the public financial situation of the Palestinian Authority has deteriorated severely over the past three months, which greatly increases the risk of the collapse of public finances."

“Revenue flows have largely dried up due to the sharp decline in Israel’s transfers of clearance revenues payable to the Palestinian Authority, and the massive decline in economic activity,” the World Bank noted in the report.

Unemployment and job loss

The Palestinian economy has suffered massive job losses according to the World Bank, with nearly half a million jobs lost since October 2023.

This distribution includes about 200,000 jobs in the Gaza Strip, 144,000 in the West Bank, and about 148,000 workers moving across the border from the occupied West Bank to the Israeli labor market.

This confirms the worsening economic crisis surrounding the region.

Poverty rates are on the rise

The World Bank report, based on official data from mid-2023, reveals that the overall poverty rate among Palestinians reached 32.8%.

It highlights a large disparity between the West Bank and the Gaza Strip, as the poverty rate in Gaza is close to 64% compared to about 12% in the West Bank. Since 2017, the poverty rate across the Palestinian territories has risen by 3.7 percentage points, with almost all of Gaza's population now living in poverty.

Income inequality

The economic report also addresses the per capita GDP, which fell to $3,360 in 2023, which represents a 12% decrease from 2022.

The besieged sector witnessed a more pronounced decline, with a 28% decline in per capita GDP, making per capita real income in 2023 the lowest ever, that is, nearly one-fifth of its counterpart in the occupied West Bank.

The World Bank expects the Palestinian economy to continue to contract in 2024, and its report estimates “another economic contraction of between 6.5 and 9.6%” in public finances, with the continued “ambiguity of the scene and uncertainty regarding the prospects for 2024.”

Source: Al Jazeera


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World Bank: The Palestinian Authority faces the risk of financial collapse