Palestine's Balance of Payment deficit increases
Following violent protests over the state of the economy, new statistics reveal a worsening situation
On Monday 24th September, Palestinian Central Bureau of Statistics (PCBS) and Palestine Monetary Authority (PMA) announced in a press release, the preliminary results of the Palestinian Balance of Payments in the Second Quarter 2012
The Balance of Payments (BOP) is an account measuring transactions between residents and non-residents in a given period. It is considered to be the peak of efforts in preparing systematic economic statistics that are necessary for observing economic performance in general and for deriving essential data used in compiling the Rest of the World Account as part of the Palestinian National Accounts. BoP consists of two main accounts, the Current Account and the Capital and Financial Account.
The main findings of the preliminary results of BoP for the second quarter of 2012 are including:
The incessant deficit of the Current Account amounted to USD 793.6 million (29.5 percent of the GDP at current prices for the 2nd quarter of 2012) with an increase of 4.0 percent compared to the 2nd quarter 2011. The deficit of Current Account was caused mainly by the deficit in the Trade Balance of goods which was USD 1,237.5 million (46.0 percent of the GDP at current prices) with an increase of 4.0 percent compared to the 2nd quarter 2011.
The deficit in Services Balance amounted to USD 90.9 million with an increase of 20.9 percent compared to the 2nd quarter 2011. The increase in this deficit was caused by the shrink of the exports in transportation services in addition to the increase of the imports in personal and cultural services and government services.
The surplus in Income Balance (compensations of employees and investments income) amounted to USD 278.0 million with an increase of 0.9 percent compared to the 2nd quarter 2011, this surplus was due to surplus in Compensations of Employees working in Israel that reached USD 251.2 million. While, the received investments income amounted to USD 30.2 million, mainly caused by the interest received on the Palestinian deposits in banks abroad.
According to the Current Transfers, the surplus value amounted to USD 256.8 million with an increase of 21.4 percent compared to the 2nd quarter 2011. The donors' current transfers was 32.7 percent of total value of receipts from abroad.
The surplus value of Capital and Financial Account amounted to USD 875.2 million, mainly caused by the surplus in Financial Account amounted to USD 804.1 million (Direct Investments, Portfolio Investments, Other Investments, and Reserve Assets).
The changes on Reserve Assets flow (increase) amounted to USD 19.7 million in PMA, which are reflected in the Overall Balance surplus in the Palestinian case due to the absence of other financing resources.
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