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Palestinian deficit to exceed $2bn in 2015

The Palestinian government’s deficit is expected to reach nearly $2 billion in 2015, the Anadolu Agency reported a Palestinian finance ministry official as saying.

The official told the agency yesterday that the Palestinian General Budget Committee and the World Bank are afraid of the continued decline in external financial support for the Palestinian government.

The official, who spoke on condition of anonymity, said the deficit in the 2015 budget would be larger than previous years because of the additional expenses needed to reconstruct the Gaza Strip.

The official pointed out that external support, in particular from the US and the EU, has witnessed a steady decline since 2012.

The total Palestinian budget for 2014 was estimated at $4.21 billion with a $1.25 billion deficit.

In October, Palestinian Minister of National Economy and Deputy Prime Minister for Economic Affairs Mohammad Mustafa demanded donor countries provide the Palestinian budget with financial support worth $1.3 billion.

At the International Conference on Reconstructing Gaza Mustafa said: “Starting from next year, the Palestinian budget will need additional external support worth $1.3 billion to fulfil its obligations to the citizens.”

The US support for the Palestinian budget declined in 2014 by $200 million to reach $100 million by the end of November. In 2013 it totalled nearly $350 million.

The total European support for the Palestinian budget during 2013 reached nearly $300 million which declined to $250 million in November 2014.

The Palestinian official pointed out that the Palestinian leadership’s political positions since 2012 contributed to declining external support to the Palestinian budget. He added that the failure of the Palestinian-Israeli talks and the signing of the Palestinian reconciliation agreement in April 2014 have had a major role in the decline, noting that the Palestinian request to join the ICC will also contribute to reducing external support.

Box:

Declining US support for the Palestinian budget:

2013: $350 million.

2014: $100 million

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