The International Monetary Fund (IMF) reported on Sunday that the Palestinian Authority’s official debt has increased substantially over the past two years and now stands at $4.3 billion, an increase of $2 billion since 2010.
The figure includes short-term local debt in the domestic banking sector and long-term external debt.
The largest creditors are Al-Aqsa Fund and the International Bank which have both given loans to fund infrastructure projects and used to lend money to local companies. Much of the debt relates to late payments and pension fund contributions, with the rest due on goods, services and private sector tax payments.
The Palestinian economy is almost entirely dependent on Israel’s as a result of the 1994 Paris Protocol on Economic Relations signed between the Israeli government and the PA. Critics also point to the high levels of corruption in the occupied West Bank.