RAMALLAH, Wednesday, June 26, 2024 (WAFA) - A sharp decline in the compensation of Palestinian workers in Israel and net current transfers has been noted during the first quarter of 2024 compared to the corresponding quarter of 2023, led to the increase in the current account deficit, reaching USD 836 million, according to a report by the Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA)
PCBS and PMA announced the preliminary results of the Palestinian Balance of Payments (BoP) for the first quarter of 2024 under the joint issuance cycle. It should be noted that the data excludes those parts of Jerusalem which were annexed by Israeli occupation in 1967.
Preliminary data for the balance of payments in the first quarter of 2024 indicate a continued deficit in the current account (goods, services, income, and current transfers), amounting to USD 836 million with an increase of 29% compared to the corresponding quarter of 2023. which reached USD 1,124 million, as well as the deficit in Services Balance, which amounted to USD 154 million.
The data indicates a decrease in the net income account during the first quarter of 2024, by 88% compared to the corresponding quarter of 2023, reaching USD 123 million. Meanwhile, foreign investment income amounted to USD 69 million, primarily resulting from interest earned on Palestinian deposits in foreign banks.
A decrease of 52% was recorded in the net current transfers from abroad to other sectors (non-governmental) during the first quarter of 2024 compared to the corresponding quarter of 2023.
The data indicates a 44% decrease in the net current transfers, reaching USD 319 million compared to the corresponding quarter of 2023. This decline is primarily attributed to the ongoing Israeli aggression against the Gaza Strip and the West Bank, significantly affecting the financial and economic activities in the region. It is noted that current transfers to the government sector accounted for only 27% of the total current transfers from abroad, while transfers to other sectors constituted 73%. It is worth mentioning that donor transfers represented only about 32% of the total current transfers from abroad.
The preliminary results showed a surplus value for the Capital and Financial Account amounted to USD 819 million, the surplus in the Capital and Financial Account was mainly caused by the surplus in the Financial Account which amounted to USD 744 million. There was a decrease in the reserve assets at PMA amounted to USD 109 million, compared to an increase of USD 85 million in the previous quarter.
It is worth mentioning that the Balance of Payments (BoP) is used to determine the economic position of a country compared to other countries worldwide and to calculate the size of its external debt. This data enables researchers and decision-makers to devise informed economic policies and development plans to improve their external balance to guarantee the stability of the state and sustain economic growth. BoP data was prepared according to the latest international recommendations taking into account the specificity of the Palestinian situation.
K.T.
