The Palestinian Authority (PA) is on the verge of financial asphyxiation, the World Bank (WB) estimated in a report on Thursday, due to the complete drying up of its resource flows and a sharp recession in the economy. Palestinian economy, which further reduces tax revenues.
At the end of last year, the PA had a deficit of $682 million, or 3.9% of Palestinian GDP, and it is expected to almost double this year to reach $1.2 billion.
The cause is the significant drop in revenues collected by the Israeli government without being transferred to the PA as well as the strong anticipated recession of the Palestinian economy, which is expected to decline in a range between 6.5% and 9.4%. , estimates the WB.
The other major reason is the strong anticipated recession in the Palestinian economy, which is expected to decline in a range between 6.5% and 9.4%, estimates the international financial institution, stressing however that it is very difficult to make accurate projections.
The situation is even more difficult, unsurprisingly, in the Gaza Strip, since its economy is expected to be divided by more than two, after having already experienced a sharp decline at the end of 2023, following the start of the Israeli offensive in response to the Hamas attack on October 7.
The sharp recession is leading to an increase in poverty in the West Bank and the Gaza Strip. In the latter, almost the entire population has fallen below the poverty line.
One of the reasons is the destruction of jobs in the last six months, almost 500,000 jobs have been lost, including 200,000 in Gaza and almost 150,000 involving Palestinians who traveled to Israel for work.
The humanitarian situation also continues to deteriorate, with food insecurity affecting 95% of the Gazan population, while the north of the Gaza Strip is now considered to be in a state of famine, where “Food insecurity is reaching catastrophic levels”underlines the report.
Based on a study by the London School of Hygiene and Tropical Medicine and the American Johns Hopkins University, the report suggests that between 58,000 and 66,000 people could die of starvation. “if the current trend continues.”
The October 7 attack resulted in the deaths of more than 1,170 people, mostly civilians, according to an AFP count based on official Israeli data.
In response to the attack, Mr Netanyahu vowed to wipe out Hamas, with its army launching a devastating offensive in the Gaza Strip. At least 35,709 Palestinians, mostly civilians, were killed in the offensive, according to data from the Health Ministry of the Hamas-led Gaza government.
