Palestine: Budget deficit over $600 million

Palestine's budget deficit stood at 25.7 per cent of GDP in the third quater of 2012, as new economic figures are released.

The deficit in current account amounted to $672.6 million - 25.7% of the GDP - for the third quarter compared to the previous quarter, the Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) said in a joint statement on Wednesday.

Preliminary results of the Palestinian balance of payments [2]showed that the deficit in the trade balance of goods amounted to $1,232 million, or 47.1% of the GDP.The deficit in services balance amounted to $84.2 million reflecting a decrease of 7.4% compared with the previous quarter caused by the difference between an increase in exports and a decrease of imports of government services.According to the release, the surplus of $279.1 million was recorded in this account, showing an increase of 0.4% compared with the previous quarter. The surplus was in compensation of employees working in Israel, which reached $247.8 million.Meanwhile, the investments income received from abroad amounted to $32.1 million, which was caused by the interest received on the Palestinian deposits in banks abroad [3].According to the net current transfers, the surplus value amounted to $364.5 million, showing an increase of 49.9% compared with the previous quarter.The donors’ current transfers [4]were 27.4% of total value of receipts from abroad.The surplus value of capital and financial account amounted to $614.1 million caused mainly by the surplus in financial account, which amounted to $532.7 million.The changes on reserve assets flows amounted to $37.2 million in the PMA, which are reflected in the overall balance surplus due to the absence of other financing resources.

New figures show that Palestine's budget deficit stands at over $600 million