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UN says Palestine's fiscal situation is reaching 'breaking point'

A Palestinian man counts stacks of banknotes at a currency exchange counter in the West Bank city of Ramallah on October 5, 2021 [ABBAS MOMANI/AFP via Getty Images]
A Palestinian man counts stacks of banknotes at a currency exchange counter in the West Bank city of Ramallah on October 5, 2021 [ABBAS MOMANI/AFP via Getty Images]

"The fiscal situation in Palestine is reaching a "breaking point," the UN's Middle East peace envoy warned Tuesday, Anadolu News Agency reports.

"Expenditures far exceed revenues, and the gap is growing. Donor support, including direct budget support, continues its multi-year decline," Tor Wennesland told the UN Security Council.

Wennesland said Palestine will have a 2021 budget deficit of around $800 million, which he said would nearly double the 2020 gap. In addition, the borrowing capacity of Palestine with the banks has been exhausted.

Israel continues to deduct millions of US dollars per month from clearance revenue transfers, which the UN envoy said is contributing to the financial crisis.

"Significant reforms and policy changes – by both Israelis and Palestinians – must be implemented to address the structural challenges," said Wennesland.

READ: Palestine tourism revenue continues to fall

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International OrganisationsIsraelMiddle EastNewsPalestineUN
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