The Palestinian Authority is at the risk of financial collapse, the World Bank said.
"Revenue streams have largely dried up due to the drastic reduction in clearance revenue transfers payable to the Palestinian Authority and a massive drop in economic activity," the institution said in a statement Thursday.
"The rapidly widening gap between the amount of revenues coming in, and the amount needed to finance essential public expenditure, is driving a fiscal crisis," it added.
While this financing gap reached $682 million in 2023, it is projected to double within the coming months to reach up to $1.2 billion.
Almost half a million jobs have been lost in the Palestinian economy since October 2023, which includes an estimated loss of 200,000 jobs in the Gaza Strip, 144,000 jobs in the West Bank, and 148,000 cross-border commuters from the West Bank to the Israeli labor market, according to the World Bank.
"The overall poverty rate of Palestinians stood at 32.8% in mid-2023," said the statement. "In Gaza, the poverty rate stood at close to 64%. In the West Bank, it was around 12%," it added.
The Palestinian economy is expected to contract anywhere between 6.5% and 9.6% this year, according to the World Bank.
