Palestinian Authority says its budget deficit is up 172% in wake of war in Gaza

The Palestinian Authority’s budget deficit is projected to surge by 172% in 2024 compared to 2023, according to a statement from the PA cabinet.

Revenues are also expected to drop by 21% due to the ongoing Israel-Hamas war in Gaza.

The announcement follows PA President Mahmoud Abbas’s approval of the emergency budget for 2024, which includes austerity measures such as reducing salaries, operational and capital expenditures, and maintaining minimal development expenditures.

The war has hindered Ramallah’s ability to pay public sector salaries in full for over two years because of reduced aid and Israel withholding tax money due to the PA’s monthly stipends to security prisoners and families of dead attackers, which Jerusalem says directly incentivizes terrorism. Israel recently transferred NIS 435 million ($116 million) in early July, the first such transfer since April.

“The Israeli government has deducted about two-thirds of Palestinian tax revenues since October last year, amounting to a NIS 3.4 billion ($937.52 million) decline from the previous year,” the statement says.

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