Tragic, Palestine Reaches Breaking Point of Fiscal Crisis

The United Nations (UN) reported that the Palestine Authority has reached a breaking point in the fiscal situation. In 2021, Palestine will experience a budget deficit of around USD 800 million or IDR 11.38 trillion.

Palestine crisis.
Illustration. Israeli occupation affects Palestine’s budget crisis. (Reuters)

ACTNews, PALESTINA – Israeli occupation in Palestine has affected the Palestinian Authority’s (PA) fiscal situation. The United Nations (UN) reports that Palestine is reaching a breaking point in its fiscal situation.

United Nations Special Coordinator for the Middle East Peace Process, Tor Wennesland says that estimates suggest that PA will have a 2021 budget deficit of around USD 800 million or equivalent to IDR 11.38 trillion.

“Donor support, including direct budget support, continues its multiyear decline,” Wennesland told the 15-member body at its monthly meeting on the Israeli-Palestinian conflict, Tuesday (10/19/2021).

Wennesland explained that PA’s fiscal crisis would nearly double the 2020 gap. In addition, the borrowing capacity of the PA with the banks has been exhausted. Meanwhile, Israel continues to deduct millions of US dollars per month from clearance revenue transfers, in response to Palestinian payments to security prisoners, their families, and the families of those killed in the context of attacks.

Wennesland voiced concern that these negative trends are occurring simultaneously across the West Bank and Gaza and should not be left unaddressed. “The unprecedented fiscal and financial crisis has prompted the need for significant reforms and policy changes - by both Israelis and Palestinians”, the UN envoy said.[]