![An employee counts money at exchange office as Israeli attacks on Gaza coupled with an embargo, cause issues surrounding foreign exchange and shekel supply in Rafah, Gaza on February 06, 2024 [Abed Zagout - Anadolu Agency]](https://i0.wp.com/www.middleeastmonitor.com/wp-content/uploads/2024/02/AA-20240206-33631839-33631830-GAZANS_FACE_CHALLENGES_IN_OBTAINING_FOREIGN_CURRENCY_AND_SHEKELS.jpg?fit=920%2C613&ssl=1)
The Palestinian Authority’s budget deficit is projected to surge by 172 per cent in 2024 compared to 2023, according to a statement from the cabinet yesterday, Reuters reported.
Revenues are also expected to drop by 21 per cent due to the ongoing conflict in Gaza.
The announcement followed President Mahmoud Abbas’ approval of the emergency budget for 2024, which includes austerity measures such as reducing salaries, operational and capital expenditures, and maintaining minimal development expenditures.
The war has hindered the Palestinian administration’s ability to pay public sector salaries in full for over two years because of reduced aid and Israel withholding tax money as a means of punitive, collective punishment against Palestinians. Israel recently transferred 435 million shekels ($116 million) in early July, the first such transfer since April.
“The Israeli government has deducted about two-thirds of Palestinian tax revenues since October last year, amounting to a 3.4 billion shekel ($937.52 million) decline from the previous year,” the statement said.
READ: Gaza death toll rises to 39,145 as Israel kills 55 more Palestinians
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