New financial crisis hits PA, leaves it unable to pay salaries

Palestinian employees wait in front of Bank of Palestine to withdrew their salaries from an ATM (Ashraf Amra -APA Images)

Middle East Monitor  /  August 9, 2021

The Palestinian government is suffering from a stifling financial crisis that will prevent it from paying the salaries of civil servants.

Palestinian officials attributed the new financial crisis to Israel’s withholding of tax revenues, the decrease in foreign aid and the rise in loans from local banks.

The Palestinian government recently expected its total expenditure for 2021 to reach $5.6 billion, compared to revenues of about $4.6 billion.

Last month, Israel deducted about $35 million from the Palestinian tax revenues which Tel Aviv said the PA uses to pay salaries for the families of Palestinian prisoners and martyrs.

Although the Palestinian Authority expected foreign aid to reach $210 million in the first half of the year, it only received $30 million.

International aid to the PA has almost completely stopped amid criticism following its failure to hold elections since 2006.