Financial Crime World

Economic Crisis Deepens in Occupied Palestinian Territories

Gaza City, Occupied Palestinian Territory - May 23, 2024

A recent report from the World Bank paints a dire picture of the banking sector in the occupied Palestinian territories, where fraud trends are on the rise and the economy teeters on the brink of collapse.

Fiscal Situation Deteriorates Significantly

According to the latest update, the fiscal situation of the Palestinian Authority has deteriorated significantly over the past three months. Revenue streams have dwindled, and economic activity has ground to a halt.

Massive Financing Gap Looms Large

The report reveals that the Palestinian Authority is facing a massive financing gap, projected to reach a staggering $1.2 billion in the coming months, up from $682 million at the end of 2023. With clearance revenue transfers and economic activity both plummeting, the authority’s options for bridging this gap are limited.

Limited Options for Bridging the Gap

Foreign assistance and arrears to public employees and suppliers are the only lifelines available to the Palestinian Authority.

Devastating Impact on Employment

The report highlights that nearly half a million jobs have been lost since October 2023, including:

  • An estimated 200,000 in Gaza
  • 144,000 in the West Bank
  • 148,000 cross-border commuters

Poverty rates are skyrocketing across all Palestinian households, with over 32% of Palestinians living below the poverty line as of mid-2023.

Disparity Between West Bank and Gaza

The disparity between the West Bank and Gaza is stark:

  • Poverty rate: nearly 64% in Gaza compared to around 12% in the West Bank
  • GDP per capita has plummeted by 12% since 2022, with Gaza’s per capita real income reaching an all-time low

Economic Contraction Projected for 2024

The report projects a further economic contraction of between 6.5 and 9.6% for 2024.

As fraud trends continue to spread through the banking sector, concerns are growing over the long-term sustainability of the Palestinian economy.

Urgent Action Needed

The World Bank’s latest update serves as a stark reminder of the urgent need for decisive action to address these pressing issues and safeguard the future of the occupied Palestinian territories.