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Roundup: Palestinians plan austerity measures against financial gap

Xinhua, December 30, 2015 Adjust font size:

The Palestinian government announced on Tuesday that it intends to take austerity measures, mainly in terms of the Palestinian National Authority (PNA) budget, to bridge the financial gap next year.

The Palestinian economy in general has been deteriorating in 2015 due to the ongoing tensions with Israel and the significant decline in international donations to the PNA.

Palestinian officials also expressed fears that Israel may continue reserving Palestinian tax revenue dues in light of the violence in the Palestinian territories since October.

The tax revenue dues Israel collects from the Palestinian international trade on behalf of the PNA covers 53 percent of the PNA monthly running cost.

They are also alert to the dangers of the decline in international funds and donations to the PNA's budget next year as a result of the tensions with Israel and the stalemate of peace negotiations since last year.

Several weeks ago, Rami Hamdallah, premier of the Palestinian consensus government, announced that international donations retreated by nearly 43 percent since 2011.

Sami Abdulla, former minister of planning and head of the Institution for Economic Studies in the West Bank, told Xinhua that the Palestinian economy is very bad and getting even weaker.

He added that the current wave of violent tensions with Israel in the Palestinian territories and the increasing Israeli measures against the Palestinians will certainly harm the Palestinian economy and cause more losses.

"If the escalation continues next year, it will certainly increase the possibilities of weakening the Palestinian economy and affect its growth," said Abdullah.

He called on the Palestinians to escalate their campaigns of boycotting Israeli products in 2016.

Last week, the Palestinian government started debating on a bill of renovating the PNA general budget 2016. Minister of Finance Shukri Bishara said 2015 witnessed many complications, mainly when Israel withheld the tax revenue dues for several months, which represent 70 percent of Palestinian income.

He also complained over a significant retreat in foreign aid to back the PNA budget.

In 2015, the PNA received 705 million U.S. dollars in aids, in comparison with 1.1 billion dollars of 2014.

The Palestinian government said that it had achieved progress in promoting its fiscal performance on three major levels, including maximizing revenues, controlling and rationalizing cost and speeding up reforms upon priority.

The Palestinian Monetary Authority has estimated that the Palestinian economy achieved a growth of 3.1 percent in 2015, thanks to the increase of investment in Gaza reconstruction and an increasing number of workers in Israel.

The government also indicated that during the past year, it managed to reduce the indebtedness of the Palestinian private sector.

A World Bank report said earlier that the Palestinians are getting poorer for the third year in a row, and that the performance of the Palestinian economy will remain at a low level.

The report stressed the need for more aid to the Palestinians to bridge the financial gap. Endit