Deficit in Current Account is USD 442.1 Million


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 first quarter of 2018 under the joint issuance cycle for the Palestinian Balance of Payments (BoP). It should be noted that the data excludes those parts of Jerusalem which were annexed by Israel occupation in 1967.

The preliminary results of BoP for the first quarter of 2018 showed:

•    An incessant deficit in the Current Account (goods, services, income, current transfers) which totaled USD 442.1 million marking an increase of 45.6% compared to the previous quarter, mainly triggered by the deficit of the Trade Balance of Goods, which reached USD 1,123.6 million, as well as the deficit in Services Balance, which  amounted to USD 235.7 million.

•    The increase in deficit of the Current Account mainly triggered by the decrease of current transfers of donors to government sector by 77.6% compared to the previous quarter.

•    The surplus in Income Account (compensations of employees and investments income) amounted to USD  568.9million with an increase of 4.5% compared to the previous quarter. This surplus was due to compensations of the employees working in Israel, which reached USD 556.8 million. As for the received investments income, it amounted to USD 34.7 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 achieved a surplus value amounted to USD 348.3 million with a decrease of 35.3% compared to the previous quarter. This was due to the decrease of the transfers of donors to the government sector. The transfers to the government sector contributed with 16.2% of total transfers from abroad, while the transfers to other sectors was 83.8%. The donors’ current transfers constituted 17.1% of total transfers from abroad.

•    The preliminary results showed a surplus value for the Capital and Financial Account amounted to USD 612.3 million, the surplus in the Capital and Financial Account was mainly caused by the surplus in the Capital Account which reached USD 95.2 million, and the surplus in Financial Account which amounted to USD 517.1 million. There was an increase in the reserve assets at PMA amounted to USD 106.6 million, compared to an increase of USD 0.1 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 the economic growth. BoP data was prepared according to the latest international recommendations taking into account the specificity of the Palestinian situation.