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COVID-19 expenses upending PA budget formulation

As the PA struggles to cope with an ongoing financial crisis, the novel coronavirus is making things worse.

RAMALLAH, West Bank —The state of emergency declared by Palestinian President Mahmoud Abbas on March 5 and the strict measures announced by the government on March 18 to stem the spread of COVID-19 in the Palestinian territories are expected to further constrain the financial capacity of the Palestinian Authority (PA). The government was expected to pay the full salary of state employees, but if the state of emergency is prolonged, a financial crisis will loom.

Two factors will contribute to deepening the PA’s financial crisis: a decrease in clearing funds (i.e., taxes and import duties) driven by a decline in trade and higher expenditures in responding to the state of emergency, such as the extensive deployment of security services in cities, amelioration of the effects of rising unemployment and increased medical costs and establishment of quarantine centers. As of April 2, there were 160 coronavirus infections recorded in the West Bank and Gaza and one death. Eighteen people had recovered from COVID-19.

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