RAMALLAH: The government today approved the fiscal year 2024 emergency budget with a total deficit of 6.8 billion shekels, according to the Ministry of Finance.
The Ministry announced in a press statement that the government approved the emergency budget for the fiscal year 2024 with a total expected revenues of 14 billion shekels, total expenditures estimated at 19.4 billion shekels, and expected grants from donor countries of approximately 2.5 billion shekels.
This came a day after President Mahmoud Abbas issued a decree law on the general budget for the fiscal year 2024 acting on the Government’s recommendation.
The Ministry explained the calculation of the emergency budget was based on reducing the financial ceilings of government institutions so as not to impact the quality of services provided, executing the budget within the cash liquidity available daily, and allocating the available financial resources based on the government’s priorities and orientations towards raising the effectiveness of the p
erformance and enhancing the quality of the services of government institutions, addressing the phenomena of spending that is not aligned with the Palestinian Reform Agenda and giving priority to the sectors of health, education, social protection and security.
The Ministry confirmed that it would proceed with its development policy by reforming the revenue system, localizing the medical service, upgrading the health sector and rationalizing health insurance fees in order to gradually reduce not only medical transfers, but also the net lending item that costs the State Treasury a lot by adopting strict collection policies and linking any support to municipalities to their efforts to reduce net lending.
The 2024 budget is based on austerity measures including: reducing not only salaries and wages expenses but also operational and capital expenditures, and maintaining development expenditures at minimum.
Current data shows that revenues are expected to decline by 21.4% compared to actual data for 2023 due to
a decline in local revenues and clearing revenues given the current political and economic conditions.
In the wake of the Israeli deductions from clearance revenues, the monthly rate of clearance revenue rate ranged between 800 to 850 million shekels. However, it recently decreased, ranging between 200 to 250 million shekels per month due to the recent arbitrary Israeli deductions in the wake of the ongoing Israeli genocidal aggression on the Gaza Strip. This means that the Israeli occupation government has deducted approximately two-thirds of Palestinian tax revenues since October 2023.
Local revenues witnessed a significant decline from a rate of 550 million shekels per month in the pre-genocidal-aggression period to a rate of 350 million shekels, which corresponds to a decline of 36%.
Regarding expenditures, total expenditures in the 2024 budget were estimated at approximately 19.4 billion shekels, representing a decrease by 7.6% from the 2023 budget and a 1.4% decrease from actual 2023 spending.
A amo
unt of 1,512 million shekels was allocated within the budget to development projects, representing a decrease by 29 and from the amount allocated in the 2023 budget.
The Ministry of Finance said that it seeks to reduce the public debt service, as it allocated 460 million shekels for the public debt service, representing a decrease of 5.5% from the amount allocated in 2023.
Acting in the spirit of national responsibility towards the Palestinian people in the Gaza Strip, the government allocated an additional amount of 100 million shekels within the 2024 budget to support the Strip, not to mention approximately five billion shekels spent annually on the Strip.
The budget assumes that the total external support would increase to 2,510 million shekels within the 2024 budget, reflecting an increase of 91% compared to the actual support for 2023. Such an improvement is ascribed to the expected increase in general budget support, as it is estimated that it would rise to 1,965 million shekels, corresponding to a r
ise by 160% compared to the actual public budget support in 2023.
Regarding support for development projects, it is expected that it would reach 545 million shekels within the 2024 budget, representing a decrease by 3% decrease from the 2023 actual budget.
The Ministry of Finance pointed out that following grants and illegal Israeli deductions, the total deficit grew to 6.8 billion shekels, increasing by 172% compared to the total deficit in 2023. This is mainly due to the decline in revenues and the huge increase in the rate of Israeli deductions from tax clearance revenues, particularly that following its aggression on Gaza, Israel imposes new deductions expected to reach 3.9 billion shekels, representing an increase of 100% and 560% compared to deductions from tax clearance revenues in 2023 and 2022 respectively.
Source: Palestine News and Information Agency – WAFA