The World Bank warned in a report on Thursday that the Palestinian Authority may face financial collapse as a result of declining economic activity and dry lines of revenue in the wake of the Gaza war.
“The fiscal situation of the Palestinian Authority has dramatically worsened in the last three months, significantly raising the risk of a fiscal collapse,” the World Bank said in a statement.
“Revenue streams have largely dried up due to the drastic reduction in clearance revenue transfers payable to the Palestinian Authority and a massive drop in economic activity.”
The authority’s deficit is predicted to increase to $1.2 billion in the upcoming months, more than double the $682 million financing shortfall at the end of 2023.
Between 6.5 to 9.6 percent was the predicted contraction of the Palestinian economy, while the Bank said that the prognosis was still “highly uncertain.”
“Increased foreign assistance and the accumulation of further arrears to public employees and suppliers are the only available financing options for the Palestinian Authority,” the World Bank said.
After Hamas launched an unprecedented bombardment on southern Israel on October 7, which killed over 1,170 people—mostly civilians—an AFP calculation of Israeli official data revealed that the conflict in Gaza had begun.
Moreover, 252 captives were taken by militants; 124 of them are still in Gaza, including 37 that the army claims are dead.
At least 35,800 people have died in Gaza as a result of Israel’s retaliatory operation, the majority of whom were women and children, according to the health ministry of the Hamas-run region.
Simultaneously, there has been a notable increase in violence in the West Bank, an area under Israeli occupation since 1967 and under the limited authority of the Palestinian Authority.
At least 518 Palestinians have been killed since October 7 by Israeli troops or settlers in the territory, according to Palestinian officials.
An AFP count of Israeli official numbers indicates that during the same period, attacks by Palestinians have claimed the lives of at least 12 Israelis in the West Bank.
The World Bank estimates that since October 2023, the Palestinian economy has lost almost to 500,000 jobs.
This includes an estimated 200,000 employment lost in the Gaza Strip and almost 150,000 jobs held by West Bank residents in Israel.
According to the World Bank, “nearly every Gazan lives in poverty at present.” Poverty has worsened.
