AJN Agency.- The World Bank warned that the financial situation of the Palestinian Authority “collapsed significantly” in the last three months and the organization’s budget deficit will reach $1.2 billion in the coming months.
In a report issued this Thursday, Ajay Banga, governor of the World Bank, noted that Palestinians’ sources of income were “severely reduced” due to restrictions on economic activities in the West Bank in the wake of the war in Gaza, which has continued since October last year between Israel and Hamas.
The Palestinian Islamic Resistance Movement (Hamas) is recognized as a terrorist organization by the United States and the European Union.
The World Bank noted: “The Palestinian budget deficit, which stood at $682 million at the end of last year, will rise to $1.2 billion in the coming months.”
According to the Bank’s forecast, regional economies could contract between 6.5 and 9.6 percent, but this forecast remains “highly uncertain.”
According to World Bank figures, since the beginning of the attack by the Palestinian organization against Israel, half a million jobs have been lost in the Palestinian territories, of which around 150,000 are in the West Bank.
Economic activity in the West Bank, under the control of the Palestinian Authority, is closely related to the security situation with Israel.
Tens of thousands of Palestinian workers, who arrived at their jobs from different areas of the West Bank each day before Hamas attacked southern Israel on October 7, lost their only livelihood since the start of the war.
According to Israel’s Defense Ministry, Israeli employers cannot use the services of Palestinian workers residing in the West Bank for fear of security attacks, such as by Hamas members against cities and towns in the country’s south.
Many of these workers participated in Israeli construction projects and have now been replaced by employees from countries such as China, India or Eastern European countries.
The World Bank noted that as a result of the unstable economic situation, the Palestinian Government’s only option is to stop paying salaries to its employees and contracting companies.
