WB warns of Palestinian financial collapse

“The Palestinian Authority’s financial situation has deteriorated significantly over the past three months, significantly increasing the risk of financial collapse,” the World Bank said in a statement. The bank forecasts that in the coming months, the government’s budget deficit will reach $1.2 billion, double its funding level of $682 million by the end of 2023. The Palestinian economy is expected to shrink by 6.5 to 9.6 percent. The bank stressed the need to increase foreign assistance to the Palestinian Authority.

According to the World Bank, nearly half a million jobs have been lost in the Palestinian economy since October 2023, when the conflict in Gaza began, including 200,000 jobs in the Gaza Strip and nearly 150,000 jobs in Israel held by Palestinians living in the West Bank. Poverty has increased and "almost everyone in Gaza now lives in poverty," the World Bank said.

Last February, the World Bank also predicted that Palestine could experience a decline in economic growth in 2023 and continue into 2024. The World Bank recorded unprecedented levels of damage to people and property in the Gaza Strip.

In another development, on the same day, Brazilian President Luiz Inacio Lula da Silva praised the decision of Spain, Ireland and Norway to recognize the State of Palestine - a measure that he said would have a "positive impact on peace and stability in the region".

On social media, President Lula da Silva affirmed that this was a “historic decision” for two reasons. First, “this decision does justice to the claim of an entire nation, recognized by more than 140 countries, for the right to self-determination” and second, “this decision will have a positive impact in supporting efforts towards peace and stability in the region”. He stressed that peace and stability “will only come when the existence of an independent Palestinian state is guaranteed”.

President Lula da Silva noted that Brazil was one of the first countries in Latin America to support Palestinian independence when it recognized the state of Palestine in 2010.