Gaza war drives Palestinian budget deficit up 172%, Palestinian Authority says

West Bank: The Palestinian Authority's budget deficit is projected to surge by 172 per cent in 2024 compared to 2023, according to a statement from the cabinet on Tuesday.

Revenues are also expected to drop by 21 per cent due to the ongoing conflict in Gaza.

The announcement followed President Mahmoud Abbas' 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 the Palestinian administration's ability to pay public sector salaries in full for over two years because of reduced aid and Israel withholding tax money. Israel recently transferred 435 million shekels ($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 3.4 billion shekel ($937.52 million) decline from the previous year," the statement said. ($1 = 3.6266 shekels)