PFRD Review : October-December 2024

Overview & Synopsis

2024 was one of the worst years for the Palestinian economy and public finances due to the impact of the Middle East conflict, centered in Gaza. The economy witnessed its largest drop on record contracting by 28 percent in 2024. In line with the economic decline, public finances also suffered significantly due to a marked fall in revenues. According to data from the Palestinian Ministry of Finance, domestic revenues fell by 19 percent while clearance revenues contracted by 17 percent in 2024, year-on-year (y/y). On top of this, increased deductions by the Government of Israel (GoI) further reduced clearance revenue transfers. Monthly Israeli deductions from clearance revenues surged to around NIS500 million since October 2023, up from an average of NIS200 million prior. As a consequence, the net amount of monthly clearance revenues transferred to the PA was substantially reduced, denying the PA full access to its primary income source for over a year, impairing its capacity to deliver services and pay public salaries.