The Deficit in the Current Account is USD 775 Million of the Palestinian Balance of Payments – Second Quarter 2022

The Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) announced the preliminary results of the Palestinian Balance of Payments (BoP) for the second quarter of 2022 under the joint issuance cycle. It should be noted that the data excludes those parts of Jerusalem which were annexed by the Israeli occupation in 1967.

The deficit in the trade balance of goods is the main reason behind the current account deficit

An incessant deficit in the Current Account (goods, services, income, current transfers) totaled USD 775 million.  Mainly triggered by the deficit of the Trade Balance of Goods, which reached USD 1,936 million, as well as the deficit in Services Balance, which amounted to USD 380 million.

The compensations of employees working in Israel are the main reason behind the income account surplus

The surplus in the Income Account (compensations of employees and investments income) amounted to USD 953 million. This surplus was due to compensations of the employees working in Israel, which reached USD 917 million. As for the received investments income, it amounted to USD 67 million; and was mainly caused by the income received on the portfolio investments abroad, in addition to the interest received on the Palestinian deposits in banks abroad.

The current transfers from abroad to other (non-government) sectors are the main reason behind the current transfers surplus

The Current Transfers achieved a surplus value amounted to USD 588 million with an increase of 7% compared to the previous quarter. where the current transfers for the government sector constituted 17% of the total transfers from abroad, while the percentage of the transfers to other sectors reached 83%.  The donors’ current transfers constituted 13% of total transfers from abroad.

The preliminary results showed a surplus value for the Capital and Financial Account amounted to USD 1 billion, the surplus in the Capital and Financial Account was mainly caused by the surplus in Financial Account which amounted to USD 901 million. There was a decrease in the reserve assets at PMA amounted to USD 34 million, compared to a decrease of USD 9 million in the previous quarter.

It is worth mentioning that the Balance of Payments (BoP) is used to determine the economic position of a country compared to other countries worldwide, and to calculate the size of its external debt. This data enables researchers and decision-makers to devise informed economic policies and development plans to improve their external balance to guarantee the stability of the state and sustain economic growth. BoP data was prepared according to the latest international recommendations taking into account the specificity of the Palestinian situation.