UN says Palestine's fiscal situation is reaching 'breaking point'

By Servet Gunerigok

WASHINGTON (AA) ‘ The fiscal situation in Palestine is reaching a "breaking point," the UN’s Middle East peace envoy warned Tuesday.

"Expenditures far exceed revenues, and the gap is growing. Donor support, including direct budget support, continues its multi-year decline," Tor Wennesland told the UN Security Council.

Wennesland said Palestine will have a 2021 budget deficit of around $800 million, which he said would nearly double the 2020 gap. In addition, the borrowing capacity of Palestine with the banks has been exhausted.

Israel continues to deduct millions of US dollars per month from clearance revenue transfers, which the UN envoy said is contributing to the financial crisis.

"Significant reforms and policy changes -- by both Israelis and Palestinians -- must be implemented to address the structural challenges," said Wennesland.