PA financial crisis affects salary payments

Middle East Monitor  /  February 1, 2022

The Palestinian Authority is facing another financial crisis, Al-Resalah reported on Monday. The sharp decline in revenue is affecting the authority’s ability to pay the salaries of its employees.

Last month, the PA paid employees 85 per cent of their normal monthly salary, but expects that to fall to 75 per cent this month. Poor families are unlikely to get the social benefits for which they have been waiting for more than a year.

Financial expert Baker Ishtayyeh told Al-Resalah that the PA has no solutions on the horizon. “Hence, it is leaning towards political solutions through understandings reached with the US administration and Israel.” Meanwhile, he said, the PA is looking at ways to reduce corruption and expenditure, as well as seeking development projects that attract revenue.

Ishtayyeh added that the local banks will not give the PA further loans due to the debts it already owes. This debt crisis has had an impact on the private sector because of the lack of cash needed for them to remain operational.

According to senior Fatah official Azzam al-Ahmad, the PA is facing a financial crisis due to Israel’s withholding of taxes that it collects on behalf of the authority. He predicted that at the current rate, the PA will only be able to pay a maximum of 50 per cent of salaries after February.