RAMALLAH, West Bank — Reconciliation between Fatah and Hamas is expected to take its toll on the Palestinian Authority's (PA) general budget for 2018, which the government will begin drafting by the end of October, a Palestinian official told Al-Monitor.

“Reconciliation — if successful — will make the next budget the largest in the history of the PA, with a possible 20% to 30% increase,” said the official, who spoke on condition of anonymity.

The PA’s fiscal year starts Jan. 1 and ends Dec. 31 of each year, in accordance with Palestinian law. The proposed budget for the current year is $4.48 billion, $4.1 billion dollars of which is allocated for current expenditures (salaries, wages, raises, operating expenses and transfers to ministries, public institutions and other executive bodies) and $350 million for development expenditures (operating expenses and capital expenditures for projects).

The issue of Gaza’s employees will pose the biggest financial challenge to the 2018 budget, with the payroll bill accounting for more than half of it. The 2017 budget allocated about $2.25 billion to salaries of current civil servants, amounting to 54% of total expenditure.