The PNA’s fiscal situation worsened ‘dramatically in the last three months’, which significantly increased a risk of a fiscal collapse, the World Bank stated.
Public revenues have largely dried up due to the drastic reduction of tax transfers to the PNA and the massive drop in economic activity.
For the coming months, the deficit is expected to reach US$1.2 billion, doubling the US$682 million funding gap recorded at the end of 2023.
This year, the Palestinian economy could shrink by 6.5% to 9.6%, but the decline could be greater, as the outlook remains ‘very uncertain’, the analysis states.
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