WASHINGTON: The World Bank has said that the Palestinian Authority is facing the possibility of fiscal collapse as revenue streams run dry and economic activity declines precipitously against the backdrop of the war in Gaza.
In a statement, the World Bank said that the fiscal situation of the Palestinian Authority has worsened in the last 90 days, significantly increasing the risk of a fiscal collapse. The World Bank statement maintained that the revenue streams have dried up due to the drastic decrease in clearance revenue transfers payable to the Palestinian Authority (PA) and a massive decrease in economic activity. In the next months, the PA’s deficit is expected to reach $1.2 billion, doubling the gap of $682 million at the end of the last year. The Palestinian economy was also predictable to contract between 6.5 and 9.6 %, although the World Bank noted that the outlook remains “uncertain.”
The World Bank said Poverty has increased and “at present, about every Gazan lives in poverty. Increased foreign help and the accumulation of further arrears to public employees and suppliers are the only available financing choices for the Palestinian Authority, the World Bank maintained. Gaza Health Ministry said that more than 35,800 people mostly women and children have been killed in Gaza since October 7. On the other hand, violence has also increased in the Occupied West Bank, which Israel has occupied since 1967 and where the PA exercises limited rule. According to Palestinian officials, more than 518 Palestinians have been killed since October 7 by Israeli forces or settlers in the area.
