Gaza war drives Palestinian budget deficit up 172%: PA

Revenues are also expected to drop by 21 percent due to the Israeli war on the Gaza Strip.

The announcement followed President Mahmoud Abbas’s approval of the emergency budget for 2024, which includes austerity measures such as reducing salaries, operational and capital expenditures, and maintaining minimal development expenditures.

The Palestinian administration’s ability to pay public sector salaries in full for over two years has been hindered by reduced aid and Israel withholding tax money it owes to the PA.

“The Israeli government has deducted about two-thirds of Palestinian tax revenues since October last year, amounting to a $937.52m decline from the previous year,” the statement said.

Flouting a UN Security Council resolution demanding an immediate cease-fire, Israel has faced international condemnation amid its continued brutal offensive on Gaza since an Oct. 7, 2023 attack by Hamas.

More than 39,000 Palestinians have since been killed, mostly women and children, and over 90,000 injured, according to local health authorities.

Over nine months into the Israeli onslaught, vast tracts of Gaza lie in ruins amid a crippling blockade of food, clean water, and medicine.