## 1wbgea2022002

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### Recent economic developments and outlook
- Real GDP grew by 7.1 percent in 2021; private consumption contributed 5½ percentage points to growth.
- Growth in Gaza was 3.4 percent in 2021.
- Employment grew by 8 percent in 2021; unemployment rate increased to 26.4 percent in 2021; unemployment in Gaza remained over 45 percent in 2021.
- Poverty in 2021: 61 and 13 percent in Gaza and the West Bank respectively (national poverty line, World Bank, 2022).
- Average inflation: rose to 1.2 percent in 2021; reached 3.9 percent y-o-y in July 2022.
- Real exchange rate appreciated by more than 10 percent (2021).
- External current account deficit decreased to 8.2 percent of GDP in 2021; imports equal almost 57 percent of GDP.
- Real GDP growth was 5.7 percent (y-o-y) in 2022Q1; 2022 full-year growth projected to decline to 4 percent.
- Inflation projected to rise to 4.9 percent in 2022.
- Medium-term growth expected to slow to estimated potential of 2 percent.

### Fiscal situation and public debt
- Fiscal deficit declined to 5.2 percent of GDP in 2021; deficit excluding grants: 7.0 percent of GDP in 2021.
- Revenues increased by 15.9 percent in 2021.
- Development spending cut to 1.3 percent of GDP in 2021; budget grants down 40 percent from 2020.
- Government debt (including arrears) increased from 34.5 percent of GDP in 2019 to 50.4 percent of GDP at end-2021.
- Government debt excluding arrears and promissory notes: 20.6 percent of GDP (end-2021).
- End-2021 arrears stock (staff estimate): 27.8 percent of GDP; published end-2021 stock of arrears: 16.7 percent of GDP.
- First half of 2022 fiscal deficit (commitment basis): 0.4 percent of GDP, compared to 2.4 percent of GDP over same period in 2021.
- Full year 2022 fiscal deficit projected at 3.5 percent of GDP.
- Under unchanged policies, government debt (including arrears) would reach 58 percent of GDP by 2027.
- Structural factors affecting fiscal position:
  - PA raises virtually no revenue from Gaza and East Jerusalem yet spent about a third of its budget in these areas in 2021.
  - Limited revenue from Area C; disagreements with Israel over Paris Protocol transfers and unilateral Israeli deductions for “prisoner payments”.
  - Donor grants not projected to increase over the medium term.

### Fiscal financing and arrears
- Net accumulation of new domestic arrears in 2021: 4.7 percent of GDP.
- Arrears consist of outstanding obligations to suppliers, private contractors, and the pension fund.
- Partial payment of public sector salaries policy in place since November 2021 has led to wage arrears.
- Estimates exclude penalties and interest on pension fund arrears (under negotiation).

### Banking sector developments and soundness
- Banking sector capital at end-June 2022: 16.7 percent of risk-weighted assets.
- Profitability at end-June 2022: 10.4 percent return on equity.
- Non-performing loans (NPLs) steady at 4.2 percent of total loans (end-June 2022); NPL coverage ratio: 96 percent.
- Liquid assets comprised 47 percent of short-term liabilities at end-June 2022.
- Banks held excess shekel cash of NIS 5 billion (equivalent to 7.2 percent of assets) at end-June 2022.
- Direct bank exposure to the PA at end-2021: 21 percent of total loans (some 11 percent of assets or 111 percent of equity); direct exposure fell to 104 percent of equity at end-February 2022.
- Loans to PA employees added 16 percent of loans (8 percent of assets) in indirect exposure.
- Palestinian banking sector composition: 13 private banks; two largest banks have market share of 46 percent; banking sector assets comprise 116 percent of GDP.
- GoI renewed letters of immunity and indemnity to the two Israeli banks that offer correspondent services to Palestinian banks until March 2023.

### Risks and vulnerabilities
- Political and socioeconomic risks: tensions around Al Aqsa mosque and settlements, evictions and demolitions, stalemate in Gaza — potential for civil unrest or confrontation with Israel.
- External shocks:
  - Renewed COVID-19 movement restrictions.
  - Russia’s war in Ukraine: direct imports from Ukraine and Russia together limited to 1.2 percent of imports; direct plus through Israel imports of wheat and flour from Ukraine and Russia comprise 59 percent of wheat and flour imports; Israel imports about 38 percent of its oil imports from Russia (UN COMTRADE 2018–19).
- Fiscal risks could impair banking sector due to banks’ large exposure to the PA.
- Potential disruption of shekel correspondent banking relations (CBRs) would have serious economic impact.
- Cessation of COVID-19-related forbearance measures in 2022 could expose asset quality weaknesses, particularly in SMEs and consumer loans.
- Gaza loan portfolios may deteriorate due to difficult conditions and destruction from May 2021 conflict.

### Authorities’ agreement, reform needs, and policy context
- Authorities broadly agree with staff’s views on the outlook and risks; note increased burden inflation puts on the population.
- They concur current fiscal outlook poses risks and requires reform; note most fiscal leakages would be resolved if Israel abided by the Paris Protocol.
- Authorities stress the 2021 deficit was contained due to good revenue performance that continued into 2022.
- Boosting growth and restoring debt sustainability will require ambitious reforms spanning several years and cooperation between the PA, the GoI and donors.
- IMF staff’s May 2022 AHLC Report provided broad parameters; this chapter details reforms needed to achieve objectives.

### Fiscal reform: key aggregates and budget stance (Percent of GDP, accrual basis; sequence: 2020, 2021 Act./Budget/Proj, 2022)
- Total revenues and grants, net: 25.3, 25.3, 26.2, 25.8
- Total revenues: 22.1, 23.5, 23.4, 24.1
- Domestic tax revenues: 4.7, 5.5, 5.7, 5.9
- Clearance revenues: 15.1, 16.0, 15.6, 16.5
- Tax refunds: 0.7, 1.0, 0.9, 1.3
- Nontax revenues: 2.4, 2.2, 2.2, 2.3
- Earmarked collections: 0.6, 0.8, 0.8, 0.8
- Grants: 3.1, 1.8, 2.8, 1.6
- Total expenditure: 32.6, 30.5, 30.0, 29.2
- Wages and salaries: 12.9, 13.4, 13.0, 13.3
- Goods and services: 4.2, 4.5, 3.8, 4.3
- Interest: 0.4, 0.7, 0.8, 0.7
- Transfers: 10.4, 7.6, 5.9, 6.7
- Minor capital: 0.2, 0.2, 0.3, 0.2
- Net lending: 2.2, 2.1, 1.5, 2.0
- Earmarked spending: 0.6, 0.8, 0.8, 0.8
- Development expenditure: 1.8, 1.3, 3.9, 1.3
- Overall balance (including grants): -7.4, -5.2, -3.8, -3.5

(Note: staff did not include some budgeted savings and additional development expenditure in its baseline because policies to yield those savings were not yet formulated or implemented.)

### Wage bill: findings and reform measures
Findings
- Wage bill accounted for 44 percent of total spending and 57 percent of total revenues (excluding grants) in 2021.
- Main causes: relatively high public sector wages (including allowances) driven by past salary increases, automatic promotions based on seniority, top-heavy grading structure.
- At end-2022Q1, average public sector salary was 32 percent above the average private sector salary.
- Security sector accounts for almost 10 personnel per 1,000 inhabitants, compared with a global average of some 4.5/1,000.

Short-term policy options
- Continue temporary policy of paying partial salaries while exempting the lowest earners until reforms generate savings.
- Temporarily suspend all recruitment and subsequently limit hiring to at most 1 staff for each staff that leaves; shift staff across departments.
- Suspend next salary and allowance increases for employees above a certain grade.
- Suspend all promotions for civilian and security personnel for the remainder of 2022.

Medium-term policy options
- Reform allowances and integrate them into base pay.
- Cease automatic salary increases and reform salary grades for new recruits.
- Consider targeted early retirement incentives (e.g., security personnel, long-service staff) if cost effective and not undermining pension viability.
- Undertake functional review of the civil service (including Gaza) and implement broad civil service reform (merit-based promotions, performance assessments, restructure/merge institutions, adopt digital technologies).

Authorities’ stance
- Authorities view the wage bill as the biggest challenge and plan an early retirement scheme, contain hiring, rotate staff, include some allowances into base pay, and restore full salary payments as conditions allow. High-level committees established to develop proposals.

### Net lending: nature, impact, and reform options
Findings
- Net lending comprised 2.1 percent of GDP in 2021.
- Net lending refers to Israel deducting payments for electricity, water and sewage provided to Palestinian consumers from clearance revenue collected on behalf of the PA; biggest component is electricity to Gaza.
- Net lending represents debt of LGUs and DisCos to the PA and constitutes transfers from central government to LGUs/DisCos; setup distorts incentives and encourages nonpayment.

Causes and aggravating factors
- Inadequate investment in grid maintenance; technical losses; significant non-technical losses due to theft, metering errors, lack of access in Area C, unbilled accounts; high Israeli supplier prices.

Policy options to reduce net lending
- Short Term: Strengthen transparency — GoI deductions should be broken down by service and recipient and reported online ahead of reconciliation; PA deductions from LGU earmarked revenues likewise.
- Medium Term: Gradually replace offsets with fixed transfers to incentivize LGU collection; professionalize utility distribution by merging municipal distribution services into DisCos and ensure cost recovery; improve LGU administrative capacity and own revenue sources; consider merging smaller LGUs.

Authorities’ actions and constraints
- Authorities created a specialized unit to develop a database with crossclaims and a procedures manual. Israeli cooperation required for timely information, enforcement in Area C, and construction of large-scale solar facilities. Political sensitivity around forcing holdout LGUs to join DisCos.

### Tax revenue strategy and fiscal leakages (Authorities’ strategy 2022–25)
Main elements
- Identify and register unregistered taxpayers (horizontal expansion).
- Strengthen coordination with customs police to curb evasion.
- Establish revenue risk management department; develop risk-based tax audit strategy.
- Require business taxpayers to use cash registers; strengthen information exchange with government agencies and banking sector.
- Develop electronic portal for taxpayers; legislate and regulate e-commerce.
- Fully integrate tax and customs administrations; automate procedures and offer electronic services including e-invoicing.
- Strengthen integrity and fight corruption.
- Emphasize “sectoral transformation” offering attractive tax rates for specific sectors (education, e-commerce, real estate, health, liberal professions, agriculture, tourism).

Findings and priorities
- Tax revenue collection already well-above peers; priority is broadening base by combating tax and customs evasion, especially underreporting among liberal professions.
- Strategy envisages a new VAT law (recently approved by cabinet), new customs law, and amendments to the 2011 income tax law.
- Strategy may involve additional tax expenditures (“sectoral transformation”); prioritization and sequencing important.

Fiscal leakages and cooperation with Israel
- Systematic changes beyond one-off payments to reduce fiscal leakages—estimated at about 1.8 percent of 2022 GDP—are paramount.
Main Fiscal Leakages, 2022 (Annual flows, percent of 2022 GDP)
- Total: 1.8
- VAT1: 0.8
- Allenby crossing fees: 0.1
- Handling fee: 0.5 (of which: Fuel 0.2)
- Other: 0.4

- e-VAT pilot launched in March (compulsory for Palestinian traders, voluntary for Israeli traders — modest take up).
- Revisit 3 percent handling fee given increased trade volumes.
- Exempt fuel imports from excise and VAT rather than taxing and refunding subject to handling fee.
- GoI increased Allenby bridge exit fees three times without sharing revenues with the PA.
- Easing access to Area C and transferring tax revenue on activity there (outside settlements and military locations) per Paris Protocol could strongly boost revenues.
- Revenues withheld by Israel because of prisoner payments present a considerable fiscal drag; other solutions recommended.

Authorities’ perspective and next steps
- Authorities view revenue strategy as underpinning recent performance and expect further implementation to boost revenue.
- Discussing bank account information exchange modalities with IMF TA input; favor rapid expansion of e-VAT, reduction of handling fee (with fuel exempt), and transfer of customs authority.
- Obtaining better fiscal data from Gaza remains elusive.

### Reform of healthcare, public pension and fuel subsidy systems
Public health system
- Key cost drivers:
  - Wages account for 60 percent of the Ministry of Health’s budget.
  - Outside medical referrals account for 90 percent of non-wage spending.
  - High pharmaceutical costs.
- Systemic issues: inefficiencies, duplication, doubtful or fraudulent claims, emphasis on tertiary rather than primary care.
- Government Health Insurance (GHI) is underfunded and poses considerable financial risks; share of non-contributory participants increased over time.
- Government containment measures: limit outside referrals, negotiate pharmaceutical prices, develop national health care price list.

Public pension system
- Fragmented across four schemes; generous benefits with replacement rates up to 100 percent of final salary; early retirement from age 45 in some schemes.
- Scheme II (unified 7 percent scheme) legally fully funded but full contributions not made; pension fund assets insufficient to meet future obligations; system operates as PAYG in practice.
- Pension Law (Public Pension Law No 7) of 2005 combined legacy schemes; Schemes I, III, IV closed to new entrants; Scheme II young.

Fuel subsidies
- PA sets retail sale price and covers General Petroleum Authority losses via fuel tax refund.
- Fuel tax refund in 2021 totaled 0.4 percent of GDP; fiscal burden increased to 0.6 percent of projected 2022 GDP in the first half of the year.
- Authorities do not see scope for immediate subsidy reductions given high wholesale prices but plan to improve targeting.

### Public financial management and arrears
- PEFA-identified weaknesses: budget calendar, binding expenditure ceilings, effectiveness of commitment controls.
- Recommended actions:
  - Move toward a medium-term budgetary framework and multi-annual commitment controls.
  - Develop prioritized medium-term public investment plan.
  - Improve cash management and timeliness of audit reports (2018 and 2019 reports issued; 2020-21 audit on track).
  - Undertake comprehensive stock taking of arrears and adopt gradual clearance strategy (cash payment, securitization), could benefit from IMF TA.
- Authorities express feasibility concerns given context and prioritize reducing then eliminating reliance on arrears contingent on fiscal consolidation and donor contributions; note significant part of arrears to suppliers is to the health sector.

### Financial sector: supervision, correspondent banking, and excess cash
Supervision and macroprudential priorities
- Intensify risk-based supervision using multi-factor stress tests (with IMF assistance).
- Reinforce bank resolution, crisis management and financial safety net toolkits; operationalize emergency liquidity assistance framework.
- Improve data collection on rescheduled/restructured loans; ensure provisioning requirements.
- Macroprudential: recently introduced leverage ratio of 4 percent and enforce concentration limits.

Correspondent banking relations (CBRs)
- Maintaining shekel CBRs essential; CBRs rely on GoI letters of immunity and indemnity.
- Alternative mechanisms discussed with Bank of Israel (BoI):
  - Two publicly-owned clearing and settlement companies (one in Israel, one in WBG), or
  - Single publicly-owned Israeli company connecting directly to Palestinian banks.
- Uncertainty remains on chosen option and continuation of services like trade finance and FX.
- PMA strengthening AML/CFT; amendments criminalizing terrorism financing and decree transcribing TF-related UN resolutions; IMF TA ahead of MENAFATF evaluation.

Excess physical shekel cash
- Excess cash defined by PMA as cash in banks’ vaults exceeding 6 percent of short-term shekel deposits.
- Staff estimates: shekel cash inflows from Palestinian workers and other sources comprised some NIS 21.2 billion in 2021; including informal imports, total net 2021 physical cash inflows estimated at NIS 19.8 billion, against BoI regular cash shipment limit of NIS 18 billion.
- Policy responses: promote digital payments (reduced interchange fees; licensing five digital payments service providers), Israeli measure requiring Israeli employers to pay Palestinian workers electronically expected to reduce cash inflows; BoI may consider increasing regular limit on physical shekel cash shipments.

### Structural reforms to boost growth and employment
Regulatory and institutional reforms
- Companies law modernized business registration and licensing and strengthened minority investor protection.
- Follow-up reforms: consumer protection law, insolvency and debt settlement regimes, competition law changes, digitalization of government services (requires GoI understanding for 4G/5G use), reform judiciary with courts for financial and commercial cases.

Labor market and education
- Labor market rigidities: large informal sector, inflexible contracting, high minimum wage of NIS 1,880 (87 percent of the average private sector wage).
- Education: high youth unemployment driven by skills mismatch; recommended vocational training, improved STEM curriculum, incentives for employers to hire young graduates for on-the-job training.

Movement, access, and trade restrictions
- Easing Israeli restrictions (movement, access, investment including Area C) and reducing costly non-tariff barriers is most important structural reform.
- Staff estimate: granting access to Area C and easing trade restrictions could boost growth by as much as 4 percentage points per year to 6 percent.
- GoI action: increase in permits for Palestinian workers in Israel and the settlements noted as welcome.

Authorities’ positions and constraints
- Authorities broadly agree but express reservations about feasibility given volatile macroeconomic environment.
- Do not see current environment for wholesale pension reform; cautious about reducing fuel subsidies immediately.
- Support intensified PMA supervision and AML/CFT improvements; concerned about possible selective connection of Israeli CBR company to only selected Palestinian banks.
- Eager to address excess cash via digital payments and welcome BoI increase in cash shipment limits aligned with economic activity.

### Staff appraisal: recovery, risks, and policy priorities
Macroeconomic context and risks
- Post-COVID recovery underway but fiscal outlook precarious: repeated political/security shocks, weak fiscal position, higher inflation.
- Recovery supported by increased employment of Palestinian workers in Israel and settlements; unemployment remains high, especially in Gaza.
- Without policy changes, public debt will continue unsustainable increase largely financed through arrears and per capita GDP will decline over the medium term.
- Downside risks: resurgence of COVID, disruptions to shekel CBRs, worsening political/security situation, sharper food and fuel price increases.

Policy priorities recommended
- Fiscal: address oversized wage bill and net lending; consider reform to health, pension and fuel subsidy expenditures; reduce reliance on arrears financing.
- Financial sector: intensify supervisory and regulatory oversight; strengthen AML/CFT regime to meet MENAFATF recommendations; operationalize alternative correspondent banking mechanism with BoI; resolve excess cash problem.
- Structural: pursue commercial legislative reform, address labor market rigidities, and improve education to spur private-sector growth and job creation.

### Debt Sustainability Analysis — summary findings and projections
Summary findings
- Government debt is unsustainable under unchanged policies; gross public debt projected to rise to almost 62 percent of GDP by 2027.
- High gross financing needs pose significant challenge.
- Combined macro-fiscal shock and political unrest shock would push debt above 80 percent of GDP by 2027; gross financing needs would increase by almost 9 percent of GDP by 2027 relative to baseline.

Structure of public debt (end-2021, percent of GDP)
- Gross debt liabilities: 50.4
- Domestic debt: 43.3
- Loans and overdrafts: 13.5
- Promissory notes: 2.0
- Arrears: 27.8
- External debt: 7.1
- Domestic debt represented 86 percent of total debt at end-2021; arrears largest component of domestic debt.

Key projections and indicators (selected)
- Baseline gross public debt projected to increase to about 62 percent of GDP by 2027; cumulative change in gross public sector debt 2022–27: 11.4.
- Public gross financing needs (percent of GDP): 2020: 9.5; 2021: 17.1; 2022: 17.4; 2023: 16.0; 2024: 15.1; 2025: 14.9; 2026: 19.3; 2027: 19.1.
- Effective interest rate (percent): 2020: 1.4; 2021: 0.9; 2022: 1.6; 2023: 1.8; 2024: 2.3; 2025: 2.7; 2026: 3.0; 2027: 3.2.
- Identified debt-creating flows (cumulative 2022-27): change in gross public sector debt: 11.4; identified debt-creating flows: 10.5; primary deficit (cumulative 2022-27): 19.0.
- Stress scenarios:
  - Growth shock: public debt to 76 percent of GDP by 2027.
  - Combined macro-fiscal shock: public debt to 82 percent of GDP by 2027.
  - Contingent liability shock: public debt to 77 percent of GDP by 2027.

Assumptions and uncertainties
- Arrears assumed main source of new financing; arrears to suppliers and contractors assumed to accrue interest of 5 percent annually for DSA.
- Stock of arrears is not audited; policy since November 2021 of partial salary payments led to wage arrears of 1.2 percent of GDP at end-June 2022.
- PA paid banks $160 million (0.9 percent of GDP) in 2022 to eliminate PNs held by banks; outstanding PNs expected paid off by end-2024.

### IMF technical assistance (2017–22) — scope and priorities
Overview
- TA provided on public financial management, revenue administration, banking regulation and supervision, stress testing, AML/CFT, national accounts, and external sector statistics.
- Priorities going forward: banking supervision, national payments system development, AML/CFT, and improving external sector and national accounts statistics.
- FAD plans TA on expenditure reform, taxation, macro fiscal planning and cash management in 2022–23.

Fiscal sector TA objectives and planned focus
- Objectives (2017–19): consolidate PFM progress, strengthen budget preparation and macro-fiscal forecasting, boost revenue mobilization via modernized tax administration.
- Planned CD focus: wage bill reform, net lending, medium-term budgeting and multi-annual commitment controls, cash management, revenue administration.
- Selected mission dates and topics listed for 2017–2022 (detailed in source).

Monetary and financial systems TA
- 2017–18 TA on implementing IFRS9 and preparing for Basel III; 2019–22 TA priorities informed by 2018 FSSR and roadmap.
- 2019–22 TA: crisis management arrangements, bank resolution tools, improved stress-testing, AML/CFT ahead of MENAFATF evaluation, national payment systems.
- Selected mission dates listed for 2017–2022 (detailed in source).

Statistics TA
- Focus on implementing international standards for national accounts and external sector statistics.
- Achievements: transparency and timeliness on par with countries with good data management; remaining needs include ESS data consistency and chain-linked national accounts.
- Selected mission dates listed for 2017–2022 (detailed in source).

*International Monetary Fund — West Bank and Gaza staff report excerpt (chapter and annexes summarized).*

### 1.   Revenue Strategy 2022–25 _________________________________________________________________ 17

### 1.   Revenue Strategy 2022–25

### Recent Economic Developments and Outlook
- Real GDP grew by 7.1 percent in 2021 following the sharp 2020 recession; private consumption contributed 5½ percentage points to growth.
- Growth in Gaza was 3.4 percent in 2021.
- Employment grew by 8 percent in 2021, yet the unemployment rate increased to 26.4 percent in 2021.
- Unemployment in Gaza remained over 45 percent in 2021.
- Poverty in 2021: 61 and 13 percent in Gaza and the West Bank respectively (national poverty line, World Bank, 2022).
- Average inflation: rose to 1.2 percent in 2021; reached 3.9 percent y-o-y in July 2022.
- Real exchange rate appreciated by more than 10 percent (2021).
- External current account deficit decreased to 8.2 percent of GDP in 2021.
- Imports equal almost 57 percent of GDP.
- Real GDP growth was 5.7 percent (y-o-y) in 2022Q1; 2022 full-year growth projected to decline to 4 percent.
- Inflation projected to rise to 4.9 percent in 2022.
- Medium-term growth expected to slow to estimated potential of 2 percent.

### Fiscal Situation and Public Debt
- Fiscal deficit declined to 5.2 percent of GDP in 2021.
- Deficit excluding grants: 7.0 percent of GDP in 2021.
- Revenues increased by 15.9 percent in 2021.
- Development spending cut to 1.3 percent of GDP in 2021.
- Budget grants down 40 percent from 2020.
- Government debt (including arrears) increased from 34.5 percent of GDP in 2019 to 50.4 percent of GDP at end-2021.
- Government debt excluding arrears and promissory notes: 20.6 percent of GDP (end-2021).
- End-2021 arrears stock (staff estimate): 27.8 percent of GDP.
- Published end-2021 stock of arrears: 16.7 percent of GDP.
- First half of 2022 fiscal deficit (commitment basis): 0.4 percent of GDP, compared to 2.4 percent of GDP over same period in 2021.
- Full year 2022 fiscal deficit projected at 3.5 percent of GDP.
- Under unchanged policies, government debt (including arrears) would reach 58 percent of GDP by 2027.
- Structural factors affecting fiscal position: PA raises virtually no revenue from Gaza and East Jerusalem yet spent about a third of its budget in these areas in 2021; limited revenue from Area C; disagreements with Israel over Paris Protocol transfers and unilateral Israeli deductions for “prisoner payments”; donor grants not projected to increase over the medium term.

### Fiscal Financing and Arrears
- Net accumulation of new domestic arrears in 2021: 4.7 percent of GDP.
- Arrears consist of outstanding obligations to suppliers, private contractors, and the pension fund.
- Partial payment of public sector salaries policy in place since November 2021 has led to wage arrears.
- Estimates exclude penalties and interest on pension fund arrears (under negotiation).

### Banking Sector Developments and Soundness
- Banking sector capital at end-June 2022: 16.7 percent of risk-weighted assets.
- Profitability at end-June 2022: 10.4 percent return on equity.
- Non-performing loans (NPLs) steady at 4.2 percent of total loans (end-June 2022).
- Liquid assets comprised 47 percent of short-term liabilities at end-June 2022.
- Banks held excess shekel cash of NIS 5 billion (equivalent to 7.2 percent of assets) at end-June 2022.
- NPL coverage ratio: 96 percent.
- Direct bank exposure to the PA at end-2021: 21 percent of total loans (some 11 percent of assets or 111 percent of equity); direct exposure fell to 104 percent of equity at end-February 2022.
- Loans to PA employees added 16 percent of loans (8 percent of assets) in indirect exposure.
- Palestinian banking sector composition: 13 private banks; two largest banks have market share of 46 percent; banking sector assets comprise 116 percent of GDP.
- GoI renewed letters of immunity and indemnity to the two Israeli banks that offer correspondent services to Palestinian banks until March 2023.

### Risks and Vulnerabilities
- Political and socioeconomic risks: tensions around Al Aqsa mosque and settlements, evictions and demolitions in East Jerusalem and the West Bank, stalemate in Gaza; potential for civil unrest or confrontation with Israel.
- External shocks: renewed COVID-19 movement restrictions; Russia’s war in Ukraine—direct imports from Ukraine and Russia together limited to 1.2 percent of imports; direct plus through Israel imports of wheat and flour from Ukraine and Russia comprise 59 percent of wheat and flour imports; Israel imports about 38 percent of its oil imports from Russia (UN COMTRADE 2018–19).
- Food and fuel price hikes could accelerate, affecting confidence, investment and growth.
- Fiscal risks could impair banking sector: banks’ large exposure to the PA (direct and indirect) risks credit deterioration if PA debt stress intensifies.
- Potential disruption of shekel correspondent banking relations (CBRs) would have serious economic impact.
- Cessation of COVID-19-related forbearance measures in 2022 could expose asset quality weaknesses, particularly in SMEs and consumer loans.
- Gaza loan portfolios may deteriorate due to difficult conditions and destruction from May 2021 conflict.

*International Monetary Fund — West Bank and Gaza staff report excerpt.*

### 14.      The authorities broadly agree with staff’s views on the outlook and risks. They note the

### The authorities broadly agree with staff’s views on the outlook and risks

### Overview and policy context
- The authorities broadly agree with staff’s views on the outlook and risks and note the increased burden inflation puts on the population.
- They concur that the current fiscal outlook poses risks and requires reform and noted that most of the fiscal leakages would be resolved if Israel abided by the provisions of the Paris Protocol.
- The authorities stress the 2021 deficit was contained despite the fragile political and socioeconomic situation, on the back of good revenue performance that has continued into 2022.

### A need for reform
- Boosting growth and putting public finances on a sustainable path will require ambitious reforms spanning several years and close cooperation between the PA, the GoI and donors.
- IMF staff’s May 2022 AHLC Report laid out the broad parameters of a macro-fiscal reform scenario; this chapter builds on it by providing more details on reforms needed to achieve these objectives.
- Taken together, the sustained and deliberate implementation of the reforms outlined would help restore debt sustainability, boost long-term economic growth, and reduce unemployment and poverty.

### Fiscal reform — key aggregates and budget stance
- The 2022 budget envisages considerable spending cuts, with the budget foreseeing a fiscal deficit of 3.8 percent of GDP.
- The lower deficit is driven almost exclusively by lower recurrent spending (transfers, goods and services, net lending, and wages) and projected increases in donor support for projects used to triple development spending to 3.9 percent of GDP in the budget.
- Staff has not included the budgeted savings and additional development expenditure in its baseline scenario because the policies to yield these expected savings have not yet been formulated and implemented.

Key fiscal aggregates (Percent of GDP, accrual basis)
- Total revenues and grants, net: 25.3, 25.3, 26.2, 25.8
- Total revenues: 22.1, 23.5, 23.4, 24.1
- Domestic tax revenues: 4.7, 5.5, 5.7, 5.9
- Clearance revenues: 15.1, 16.0, 15.6, 16.5
- Tax refunds: 0.7, 1.0, 0.9, 1.3
- Nontax revenues: 2.4, 2.2, 2.2, 2.3
- Earmarked collections: 0.6, 0.8, 0.8, 0.8
- Grants: 3.1, 1.8, 2.8, 1.6
- Total expenditure: 32.6, 30.5, 30.0, 29.2
- Wages and salaries: 12.9, 13.4, 13.0, 13.3
- Goods and services: 4.2, 4.5, 3.8, 4.3
- Interest: 0.4, 0.7, 0.8, 0.7
- Transfers: 10.4, 7.6, 5.9, 6.7
- Minor capital: 0.2, 0.2, 0.3, 0.2
- Net lending: 2.2, 2.1, 1.5, 2.0
- Earmarked spending: 0.6, 0.8, 0.8, 0.8
- Development expenditure: 1.8, 1.3, 3.9, 1.3
- Overall balance (including grants): -7.4, -5.2, -3.8, -3.5

(Note: the four numbers per line correspond to the sequence presented in the source for 2020, 2021 Act./Budget/Proj and 2022.)

### Wage bill — findings and reform measures
Findings
- The public wage bill contributes considerably to fiscal pressures.
- The wage bill accounted for 44 percent of total spending and 57 percent of total revenues (excluding grants) in 2021.
- Main causes: relatively high public sector wages (including allowances) driven by high past salary increases often out of sync with inflation and private-sector wage trends; automatic promotions based on seniority rather than performance leading to a top-heavy grading structure.
- Overall size of the public sector is not unduly large by international standards, even when employees in Gaza are included.
- At end-2022Q1, the average public sector salary was 32 percent above the average private sector salary.
- The security sector accounts for almost 10 personnel per 1,000 inhabitants, compared with a global average of some 4.5/1,000 (World Bank May 2022 AHLC Report).

Short-term policy options (from the source)
- Continue the current temporary policy of paying partial salaries to public sector employees while exempting the lowest earners, until policy reforms generate substantial savings on the wage bill.
- Temporarily suspend all recruitment in the public sector and subsequently limit it by hiring at most 1 staff for each staff that leaves the service. Meet employment needs in specific sectors by shifting staff across departments.
- Suspend the next salary and allowance increases for employees above a certain grade.
- Suspend all promotions for civilian and security personnel for the remainder of 2022.

Medium-term policy options (from the source)
- Reform the system of allowances and integrate them into base pay.
- Cease the practice of automatic salary increases and reform salary grades for new recruits.
- Consider early retirement incentives, provided these are well targeted (e.g., security personnel, staff with long employment records) and cost effective, and do not undermine the viability of the pension system.
- Undertake a functional review of the civil service, including in Gaza, and implement broad-based civil service reform aligned with a new vision of about the role of government: align staffing to functions and needs, modernize human resource management (merit-based promotions, performance-based annual assessment), restructure or merge public institutions, move positions as needed, and adopt digital technologies.

Authorities’ stance
- The authorities consider the wage bill the biggest challenge for public finances and plan to shrink public sector employment via a new early retirement scheme for civil servants and security personnel.
- They plan to contain subsequent hiring, rely on rotation of existing staff to open positions, include some allowances into base pay, and remain committed to restoring full salary payments as conditions allow.
- High-level committees have been set up to further develop these reform proposals.

### Net lending — nature, impact, and reform options
Findings
- Net lending comprised 2.1 percent of GDP in 2021.
- Net lending refers to the system by which Israel deducts payments (including for delay fines and addressing outstanding debt) for electricity, water and sewage services provided to Palestinian consumers through local government units (LGUs) and Palestinian distribution companies (DisCos) from the clearance revenue it collects on behalf of the PA.
- By far the biggest component of net lending consists of electricity provision to Gaza, followed by electricity to West Bank, water provision and sewage services.
- Net lending represents debt of LGUs and DisCos to the PA and associated deductions constitute transfers from the central government to LGUs/DisCos.
- The setup distorts incentives and reflects weaknesses in intergovernmental relations, encouraging nonpayment and use of collections for other purposes by LGUs, and untransparent cross claims when the PA withholds earmarked revenues as a partial offset for Israeli deductions.

Causes and aggravating factors
- Inadequate investment in maintenance and upgrading of the electricity grid leading to technical losses.
- Significant non-technical losses due to theft, metering errors, lack of access to meters in Area C, and unbilled accounts.
- High prices by the Israeli supplier further contribute to weaknesses.
- Problems are particularly prominent in Palestinian refugee camps and Gaza (where the PA receives no utility revenue); water and sewage networks suffer similar issues.

Policy options to reduce net lending
Short Term
- Strengthen transparency: deductions by the GoI should be clearly broken down by service and recipient, and reported online well-ahead of reconciliation meetings with the PA to allow for audit and reconciliation before deductions are made. So should deductions by the PA from LGU’s earmarked revenues.

Medium Term
- Gradually replace offsets with fixed transfers to incentivize LGU collection and improve transparency in intergovernmental relations.
- Professionalize utility distribution services: complete the move towards integrated DisCos by merging remaining municipal distribution services into the existing DisCos, and ensure cost recovery; promote arms-length arrangements for water and sewage services.
- Improve LGU administrative capacity and increase LGU own revenue sources; accompany with reforms to limit potential drain on PA resources (e.g., review or approval of LGU budgets by the PA and a prohibition of borrowing by LGUs). Consider broader reform of LGUs by merging smaller units.

Authorities’ actions and constraints
- The authorities see net lending as a major challenge and are making efforts (e.g., a specialized unit to develop a database with crossclaims and a procedures manual).
- Israeli cooperation is required for more timely information on bills and deductions, enforcement in Area C (e.g., disconnection on nonpayment), and allowing construction of large-scale solar generation facilities.
- More ambitious reforms (forcing holdout LGUs to join DisCos or merging LGUs) are politically sensitive and would need to be paired with increased LGU resources.
- A pilot is starting to enable five municipalities to collect property tax themselves to boost ownership and collection.

### Tax revenue strategy and fiscal leakages
Authorities’ revenue strategy (2022–25) — main elements
- Identifying and registering unregistered taxpayers (horizontal expansion).
- Strengthening coordination with the customs police to curb tax evasion.
- Establishing a revenue risk management department.
- Developing a risk-based tax audit strategy.
- Requiring business taxpayers to use cash registers.
- Strengthening coordination with relevant government agencies to exchange information.
- Electronically linking the public sector and the private sector, particularly the banking sector, to facilitate exchange of information on taxpayers.
- Developing and promoting use of an electronic portal for taxpayers.
- Developing legislation and regulations governing e-commerce.
- Fully integrating the tax and customs administrations by completing networking of the various computerized systems (including a comprehensive taxpayer database) and creating a customs and tax inspection department.
- Automating all customs and tax procedures and offering electronic services to taxpayers, including e-invoicing.
- Strengthening integrity and fighting corruption.
- Emphasizes “sectoral transformation” offering attractive tax rates on specific sectors (e.g., education, e-commerce, real estate, health, liberal professions, agriculture, tourism).

Findings and priorities
- Tax revenue collection is already well-above peers; strategy appropriately focuses on broadening the tax base through combating tax and customs evasion.
- A key priority is combating underreporting among liberal professions (e.g., doctors, lawyers).
- Authorities are seeking to strengthen banks’ information exchange with tax authorities but note the need for careful modalities to ensure safeguards and minimize burden on banks.
- The strategy envisages a new VAT law (recently approved by cabinet), as well as a new customs law and amendments to the 2011 income tax law.
- The strategy may involve additional tax expenditures (“sectoral transformation”), contrary to past advice to review and trim exemptions; prioritization and sequencing will be important.

Fiscal leakages and cooperation with Israel
- Systematic changes beyond one-off payments to reduce fiscal leakages—estimated at about 1.8 percent of 2022 GDP—are paramount.
Main Fiscal Leakages, 2022 (Annual flows, percent of 2022 GDP)
- Total: 1.8
- VAT1: 0.8
- Allenby crossing fees: 0.1
- Handling fee: 0.5 (of which: Fuel 0.2)
- Other: 0.4

- The e-VAT pilot launched in March is a first step to tackle VAT leakage: traders on both sides can issue transaction receipts digitally; it is compulsory for Palestinian traders but voluntary for Israeli traders at present, resulting in modest take up.
- Revisiting the 3 percent handling fee in light of significantly increased trade volumes over the past two and a half decades would be opportune.
- Exempting fuel imports from excise and VAT rather than the current practice of charging and subsequently refunding the tax to the PA subject to the 3 percent handling fee would be an important first step.
- The GoI has unilaterally increased Allenby (King Hussein) bridge exit fees three times but has not shared the increased revenues with the PA.
- Easing access for Palestinian business to Area C and transferring the tax revenue on economic activity in Area C (outside the settlements and military locations) in line with the Paris Protocol would have a further strong impact on revenues.
- Revenues withheld unilaterally by Israel because of prisoner payments present a considerable fiscal drag; other solutions should be found to support needy families, accompanied by cessation of these deductions and release of the stock of withheld funds.

Authorities’ perspective and next steps
- The authorities view their revenue strategy as underpinning recent good revenue performance and expect gradual further implementation to continue to boost revenue.
- They are discussing options to organize exchange of bank account information with tax authorities, building on IMF revenue administration TA advice.
- The authorities strongly support faster progress on resolving outstanding fiscal files and want more timely, less arbitrary information on CR deductions.
- They favor rapid expansion of e-VAT coverage to include all trade, reduction of the handling fee (with fuel purchases exempt), and transfer of customs authority to proceed.
- Obtaining better fiscal data from Gaza remains elusive due to political circumstances.

*Source: IMF staff chapter content.*

### 28.      Reform of the healthcare, public pension and fuel subsidy systems   present other

### 28.      Reform of the healthcare, public pension and fuel subsidy systems   present other

### Public health system: drivers, inefficiencies, and risks
- Key cost drivers:
  - Wages account for 60 percent of the Ministry of Health’s budget.
  - Outside medical referrals account for 90 percent of non-wage spending.
  - High pharmaceutical costs.
- Systemic issues:
  - Inefficiencies, duplication of service, doubtful or fraudulent claims, and emphasis on tertiary rather than primary care.
  - The Government Health Insurance (GHI) system is underfunded and poses considerable financial risks to the PA.
  - The GHI scheme was established in 1994 and offers non-contributory coverage for those facing hardship; over time the share of non-contributory participants increased, lowering revenues and increasing spending for the GHI.
- Government actions noted:
  - Containment measures: limiting outside medical referrals, negotiating to cut pharmaceutical prices, and developing a national health care price list.

### Public pension system: fragmentation and sustainability
- Structure and features:
  - The public pension system for civil servants and security personnel is fragmented across four different schemes.
  - All schemes provide generous benefits, with some featuring replacement rates up to 100 percent of final salary, broad eligibility criteria, and early retirement from age 45.
- Legal and fiscal status:
  - Scheme II (the unified 7 percent scheme) is legally fully funded, but the government has been unable to make full required contributions.
  - Pension fund assets are insufficient to meet future obligations, rendering the system unsustainable in practice; the system operates as a PAYG system with the PA paying current pension outlays.
- Notes on schemes (as described in source):
  - Pension Law (Public Pension Law No 7) of 2005 combined legacy schemes as Scheme I (10 percent), Scheme IV (2 percent); Scheme II created for new public-sector employees; Scheme III for security forces older than 45. Schemes I, III, and IV are closed to new entrants and being phased out; Scheme II is young with most contributors not yet at retirement age.

### Fuel subsidies: mechanism and fiscal burden
- Mechanism:
  - The PA sets the retail sale price for each fuel type in the Palestinian territories.
  - Fuel subsidies cover losses incurred by the General Petroleum Authority from selling below purchase price; the PA covers these losses through a fuel tax refund.
- Fiscal impact:
  - In 2021 the fuel tax refund totaled 0.4 percent of GDP.
  - Amid rising fuel prices, the fiscal burden increased to 0.6 percent of projected 2022 GDP in the first half of the year as the PA sought to contain passthrough of import prices to consumers.
- Authorities’ stance:
  - Authorities do not see scope for reducing fuel subsidies immediately given high wholesale prices but plan to improve targeting and acknowledge fiscal pressures may compel subsidy reductions going forward.

### Public financial management and arrears
- PEFA-identified weaknesses:
  - Budget calendar, setting of binding expenditure ceilings, and effectiveness of commitment controls.
- Recommended actions:
  - Gradual move toward a medium-term budgetary framework, including multi-annual commitment controls consistent with a medium-term macro-fiscal framework.
  - Develop a prioritized medium-term public investment plan.
  - Improve cash management and timeliness of audit reports by the State Audit and Administrative Control Bureau (2018 and 2019 reports issued; 2020-21 audit on track for completion by year end).
  - Undertake comprehensive stock taking of arrears and adopt a strategy for gradual clearance based on clear and transparent criteria; strategy could include cash payment of arrears and securitization and could benefit from IMF technical assistance.
- Authorities’ reservations:
  - Feasibility concerns given current context; priority to reduce then eliminate reliance on arrears financing contingent on fiscal consolidation and increased donor contributions.
  - Note that a significant part of arrears to suppliers is to the health sector.

### Financial sector: supervision, correspondent banking, and excess cash
- Supervisory and regulatory priorities for the PMA:
  - Intensify risk-based supervision, informed by multi-factor stress tests developed with IMF assistance and IMF TA recommendations.
  - Reinforce bank resolution, crisis management, and financial safety net toolkits; operationalize emergency liquidity assistance framework.
  - Improve data collection on rescheduled and restructured loans and ensure banks abide by provisioning requirements.
  - Macroprudential action: recently introduced a leverage ratio of 4 percent and continued enforcement of concentration limits.
- Correspondent banking relations (CBRs):
  - Maintaining shekel CBRs is essential for financial and economic stability; CBRs rely on letters of immunity and indemnity issued by the GoI to Israeli correspondent banks.
  - Alternative mechanism options under discussion with the Bank of Israel (BoI):
    - Two publicly-owned clearing and settlement companies (one in Israel, one in WBG) as intermediaries, or
    - A single publicly-owned Israeli company connecting directly to Palestinian banks.
  - Uncertainty remains on which option to implement and on continuation of ancillary services such as trade finance and foreign exchange.
  - PMA is strengthening AML/CFT framework, including amendments criminalizing terrorism financing (TF) and a decree transcribing TF-related UN security resolutions into national law; IMF TA provided ahead of MENAFATF onsite evaluation.
- Excess physical shekel cash:
  - Issue: excessive physical shekel cash in Palestinian banks represents a drag on profitability and a security risk.
  - PMA definition: excess shekel cash is cash in banks’ vaults exceeding 6 percent of short-term shekel deposits.
  - Estimated inflows and limits:
    - Staff estimates suggest shekel cash inflows from Palestinian workers and other sources comprised some NIS 21.2 billion in 2021.
    - Including informal imports, total net 2021 physical cash inflows are estimated at NIS 19.8 billion, against a BoI regular cash shipment limit of NIS 18 billion.
  - Policy responses:
    - Promote digital payments: reduced interchange fees on domestic POS transactions and licensing of five digital payments service providers offering e-wallets.
    - Israeli measure requiring Israeli employers to pay Palestinian workers electronically expected to reduce cash inflows significantly.
    - BoI should consider periodically increasing the regular limit on physical shekel cash it accepts, in line with estimates of accumulated shekel coins and notes through real economic activity.

### Structural reforms to boost growth and employment
- Regulatory and institutional reforms:
  - Recent adoption of the companies law modernized business registration and licensing and strengthened minority investor protection.
  - Follow-up reforms: adopt and implement consumer protection law, insolvency and debt settlement regimes, and consider changes to competition law to ensure independence and strengthen competition department prerogatives.
  - Digitalization of government services to drive broader digital transformation; requires GoI understanding to allow Palestinian operators 4G and 5G spectrum use.
  - Reform judiciary and create courts dedicated to financial and commercial cases to ensure speedy and consistent law application and property rights protection.
- Labor market and education:
  - Labor market rigidities: large informal sector, inflexible labor contracting, and a high minimum wage of NIS 1,880 (87 percent of the average private sector wage).
  - Education issue: high youth unemployment driven by skills mismatch despite a well-educated labor force.
  - Recommended reforms: education reform focused on vocational training, improved STEM curriculum, and incentives for employers to hire young graduates for on-the-job training.
- Movement, access, and trade restrictions:
  - Easing Israeli restrictions on movement of goods and people and on investment is the most important structural reform for growth.
  - Twofold restrictions:
    - Movement, access and investment restrictions, including in Area C.
    - Trade restrictions in the form of costly non-tariff barriers.
  - Staff estimate: granting Palestinian businesses access to and allowing investment in Area C (excluding areas subject to final status negotiations) and easing trade restrictions could boost growth by as much as 4 percentage points per year to 6 percent.
  - GoI action: increase in the number of permits for Palestinian workers in Israel and the settlements is a welcome step.

### Authorities’ positions and implementation constraints
- Authorities broadly agree with recommendations but express reservations about feasibility given current context and volatile macroeconomic environment.
- Specific stances:
  - Do not see current environment as right for wholesale pension reform; assert arrears to the pension fund do not have immediate impact on the real economy.
  - Plan to improve targeting of fuel subsidies but are cautious about reductions amid high wholesale prices.
  - Note medium-term budget framework exists in principle but is not operational due to macroeconomic volatility.
  - Support intensified PMA supervision and AML/CFT improvements; concerned about possible selective connection of Israeli CBR company to only selected Palestinian banks.
  - Eager to address excess cash via digital payments and welcome BoI increase in cash shipment limits aligned with economic activity.

### Staff appraisal: recovery, risks, and policy priorities
- Macroeconomic context and risks:
  - Post-COVID recovery underway but fiscal outlook remains precarious with multiple risks: repeated political and security shocks, weak fiscal position, higher inflation.
  - Recovery supported in part by increased employment of Palestinian workers in Israel and the settlements; unemployment remains high, especially in Gaza.
  - Without policy changes, public debt will continue unsustainable increase largely financed through arrears and per capita GDP will decline over the medium term.
  - Downside risks: resurgence of COVID, disruptions to shekel CBRs, worsening political/security situation, sharper-than-expected increases in food and fuel prices triggering unrest.
- Policy priorities recommended:
  - Fiscal: address oversized wage bill and net lending; consider reform to health, pension and fuel subsidy expenditures; reduce reliance on arrears financing.
  - Financial sector: intensify supervisory and regulatory oversight; strengthen AML/CFT regime by addressing MENAFATF recommendations; operationalize alternative correspondent banking mechanism with BoI; resolve excess cash problem.
  - Structural: pursue commercial legislative reform, address labor market rigidities, and improve education to spur private sector growth and job creation.

*International Monetary Fund — excerpt from chapter on reforms to healthcare, public pension, and fuel subsidy systems*

### 41.      Lasting improvements in economic prospects require transformational reform by the

### 1wbgea2022002 - 41.      Lasting improvements in economic prospects require transformational reform by the

### Summary finding: reforms required to restore prospects
- Lasting improvements in economic prospects require transformational reform by the PA, Israel, and donors.
- A coordinated effort focused on:
  - PA spending reform,
  - Israeli-Palestinian agreement on the resolution of the outstanding fiscal files (fiscal leakages),
  - relaxation of Israeli restrictions on the movement of goods and people and on investment, including in Area C,
  - and modest additional donor support
  would help restore public debt sustainability and unleash private-sector-led growth, reducing unemployment and poverty.

### Macroeconomic projections and key statistics (2019–27)
- Per capita GDP: $3,045; 2020 est.
- Poverty rate: 14 percent in the West Bank and 53 percent in Gaza Strip; 2017 est.
- Real GDP (2019–27, annual percentage change):
  - 2019: 1.4
  - 2020: -11.3
  - 2021: 7.1
  - 2022: 4.0
  - 2023: 3.5
  - 2024: 2.4
  - 2025: 2.0
  - 2026: 2.0
  - 2027: 2.0
- Unemployment rate (period average): 2019: 25.4; 2020: 25.9; 2021: 26.4; 2022: 25.7; 2023: 25.0; 2024: 24.5; 2025: 24.2; 2026: 24.1; 2027: 24.0
- CPI inflation rate (end-of-period): 2019: 1.3; 2020: 0.1; 2021: 1.3; 2022: 5.7; 2023: 3.8; 2024: 2.5; 2025: 2.2; 2026: 2.3; 2027: 2.0
- Gross capital formation (percent of GDP): 2019: 26.8; 2020: 24.3; 2021: 25.8; 2022: 27.7; 2023: 25.4; 2024: 23.6; 2025: 22.0; 2026: 20.6; 2027: 19.7
- Gross national savings (percent of GDP): 2019: 16.4; 2020: 12.1; 2021: 17.5; 2022: 17.5; 2023: 17.2; 2024: 13.3; 2025: 11.9; 2026: 10.6; 2027: 9.8
- Current account balance (excluding official transfers, percent of GDP): 2019: -13.3; 2020: -14.5; 2021: -9.3; 2022: -11.1; 2023: -9.8; 2024: -11.1; 2025: -10.9; 2026: -10.8; 2027: -10.6
- Nominal GDP (in millions of U.S. dollars): 2019: 17,134; 2020: 15,532; 2021: 18,037; 2022: 19,677; 2023: 21,059; 2024: 22,146; 2025: 23,164; 2026: 24,159; 2027: 25,146
- Per capita nominal GDP (U.S. dollars): 2019: 3,443; 2020: 3,045; 2021: 3,451; 2022: 3,678; 2023: 3,847; 2024: 3,956; 2025: 4,047; 2026: 4,131; 2027: 4,210

### Public finances and fiscal projections (selected figures, percent of GDP and levels)
- Total revenues and grants (percent of GDP): 2019: 23.1; 2020: 25.3; 2021: 25.3; 2022: 25.8; 2023: 26.9; 2024: 26.0; 2025: 26.0; 2026: 26.0; 2027: 26.0
- Revenues (percent of GDP): 2019: 20.3; 2020: 22.1; 2021: 23.5; 2022: 24.1; 2023: 24.4; 2024: 24.5; 2025: 24.5; 2026: 24.6; 2027: 24.6
- Grants (percent of GDP): 2019: 2.9; 2020: 3.1; 2021: 1.8; 2022: 1.6; 2023: 2.4; 2024: 1.6; 2025: 1.5; 2026: 1.5; 2027: 1.4
- Total Expenditure (percent of GDP): 2019: 27.6; 2020: 32.6; 2021: 30.5; 2022: 29.2; 2023: 29.9; 2024: 30.1; 2025: 30.3; 2026: 30.4; 2027: 30.6
- Overall balance (commitment, before external support, percent of GDP): 2019: -7.3; 2020: -10.5; 2021: -7.0; 2022: -5.1; 2023: -5.5; 2024: -5.6; 2025: -5.8; 2026: -5.8; 2027: -5.9
- Overall balance (commitment, percent of GDP): 2019: -4.5; 2020: -7.4; 2021: -5.2; 2022: -3.5; 2023: -3.1; 2024: -4.0; 2025: -4.3; 2026: -4.4; 2027: -4.5
- Identified financing (percent of GDP): 2019: 4.2; 2020: 7.4; 2021: 5.2; 2022: -1.5; 2023: -1.6; 2024: -1.6; 2025: -1.6; 2026: -1.6; 2027: -1.6
- Financing gap / Residual (percent of GDP): 2019: 0.3; 2020: 0.0; 2021: 0.0; 2022: 0.5; 2023: 0.0; 2024: 0.4; 2025: 0.7; 2026: 0.9; 2027: 0.9
- Public debt (percent of GDP, including arrears): 2019: 34.5; 2020: 47.1; 2021: 50.4; 2022: 49.7; 2023: 49.5; 2024: 51.1; 2025: 53.1; 2026: 55.3; 2027: 57.7
- Central government debt (incl. arrears) (in millions of U.S. dollars): 2019: 6,057; 2020: 7,751; 2021: 9,372; 2022: 9,046; 2023: 9,550; 2024: 10,268; 2025: 11,073; 2026: 11,924; 2027: 12,941

### Central government fiscal operations (selected levels, 2019–27 in millions of U.S. dollars)
- Revenue and grants: 2019: 3,964; 2020: 3,923; 2021: 4,563; 2022: 4,847; 2023: 5,209; 2024: 5,253; 2025: 5,435; 2026: 5,635; 2027: 5,862
- Tax revenue: 2019: 3,024; 2020: 2,970; 2021: 3,701; 2022: 3,964; 2023: 4,149; 2024: 4,323; 2025: 4,481; 2026: 4,658; 2027: 4,855
- Clearance revenues (in millions of U.S. dollars): 2019: 2,433; 2020: 2,350; 2021: 2,888; 2022: 3,097; 2023: 3,193; 2024: 3,323; 2025: 3,444; 2026: 3,579; 2027: 3,726
- Total expenditure and net lending: 2019: 4,731; 2020: 5,068; 2021: 5,506; 2022: 5,502; 2023: 5,806; 2024: 6,066; 2025: 6,334; 2026: 6,581; 2027: 6,882
- Current spending: 2019: 4,071; 2020: 4,452; 2021: 4,891; 2022: 4,879; 2023: 5,164; 2024: 5,398; 2025: 5,642; 2026: 5,865; 2027: 6,137
- Wages and salaries: 2019: 1,866; 2020: 2,001; 2021: 2,413; 2022: 2,510; 2023: 2,592; 2024: 2,720; 2025: 2,852; 2026: 2,982; 2027: 3,138
- Overall balance (in millions of U.S. dollars): 2019: -767; 2020: -1,145; 2021: -943; 2022: -655; 2023: -597; 2024: -813; 2025: -899; 2026: -946; 2027: -1,020
- Financing (in millions of U.S. dollars): 2019: 722; 2020: 1,145; 2021: 942; 2022: -288; 2023: -305; 2024: -317; 2025: -329; 2026: -340; 2027: -354
- Residual/Financing gap (in millions of U.S. dollars): 2019: 450; 2020: 194; 2021: 390; 2022: 21; 2023: 1,130; 2024: 1,228; 2025: 1,287; 2026: 1,374; 2027: 1,374

### Financial sector soundness (selected indicators)
- Tier I capital to risk-weighted assets: Dec-17: 15.5; Dec-18: 16.0; Dec-19: 15.6; Mar-20: 15.5; Jun-20: 15.2; Sep-20: 15.0; Dec-20: 13.9; Mar-21: 14.1; Jun-21: 14.3; Sep-21: 14.6; Dec-21: 14.3; Mar-22: 14.3; Jun-22: 14.9
- Nonperforming loans (percent of total loans): Dec-17: 2.3; Dec-18: 3.0; Dec-19: 4.1; Mar-20: 4.0; Jun-20: 3.9; Sep-20: 3.7; Dec-20: 4.2; Mar-21: 4.2; Jun-21: 4.2; Sep-21: 4.3; Dec-21: 4.2; Mar-22: 4.2; Jun-22: 4.2
- Coverage ratio (provisions as percent of nonperforming loans): Dec-17: 58.4; Dec-18: 86.2; Dec-19: 75.0; Mar-20: 80.4; Jun-20: 86.2; Sep-20: 91.7; Dec-20: 86.1; Mar-21: 86.4; Jun-21: 89.0; Sep-21: 90.3; Dec-21: 94.4; Mar-22: 94.6; Jun-22: 95.7
- Return on assets (ROA): Dec-17: 1.5; Dec-18: 1.5; Dec-19: 1.3; Mar-20: 1.1; Jun-20: 0.8; Sep-20: 0.8; Dec-20: 0.8; Mar-21: 1.4; Jun-21: 1.3; Sep-21: 1.3; Dec-21: 1.2; Mar-22: 1.4; Jun-22: 1.4

### Risk Assessment Matrix — main risks and mitigation policies
- Domestic risks (selected, relative likelihood and expected impact):
  - The PA’s fiscal trajectory remains unaltered.
    - Relative Likelihood: High
    - Expected Impact If Realized: High
    - Consequences: Large fiscal deficits persist, financed by an increasing stock of arrears; cascading arrears cause liquidity shortages; debt (including arrears) is unsustainable.
    - Policies to mitigate: Pursue gradual fiscal consolidation centered on expenditure reform; take stock of arrears and devise a strategy to clear them; ensure the banking system remains well capitalized.
  - Fiscal crisis spilling over to the banking sector.
    - Relative Likelihood: Medium/High
    - Expected Impact If Realized: High
    - Consequences: Banks’ asset quality could be hurt given high direct and indirect exposure to the PA, undermining financial stability and growth.
    - Policies to mitigate: Ensure banking system remains well capitalized; gradually reduce banks’ exposure to the PA; strengthen bank supervision and crisis management capacity.
  - Reduced financial services by Israeli correspondent banks.
    - Relative Likelihood: High
    - Expected Impact If Realized: High
    - Consequences: Loss of correspondent relations would lead to trade and financial disruption, shift into cash/informality, harming growth.
    - Policies to mitigate: Work with Israeli counterparts to operationalize an alternative CBR mechanism and strengthen cross-border payment systems; strengthen AML/CFT framework and implementation capacity, including with possible technical assistance.
  - Escalating social tensions due to lack of opportunities or prospects for peace and rising food and fuel prices.
    - Relative Likelihood: High
    - Expected Impact If Realized: High
    - Consequences: Civil unrest or confrontation with Israel, undermining growth and intensifying humanitarian crisis in Gaza.
    - Policies to mitigate: Sound macroeconomic management and economic reform to instill confidence; provide targeted and temporary support if fiscal situation allows.
  - Israel tightens restrictions on movement of goods and people further.
    - Relative Likelihood: Medium
    - Expected Impact If Realized: High
    - Consequences: Economic growth hit hard; loss of incomes for Palestinian guest workers; lower transfers into WBG.
    - Policies to mitigate: Seek additional grants to partially compensate population for associated hardship.
  - Donor support remains low or declines further.
    - Relative Likelihood: High
    - Expected Impact If Realized: Medium
    - Consequences: Implementation of reform agenda becomes more difficult.
    - Policies to mitigate: Pursue comprehensive reform agenda to improve macroeconomics; entice donors to contribute through increased grants.
- Global risks:
  - Local COVID-19 outbreaks.
    - Relative Likelihood: Medium
    - Expected Impact If Realized: Medium/High
    - Policies to mitigate: Provide targeted support by shifting spending away from lower priority areas; strengthen banking sector crisis management capacity.
  - Intensifying spillovers from Russia’s war on Ukraine and commodity price shocks.
    - Relative Likelihood: High
    - Expected Impact If Realized: Medium/High
    - Policies to mitigate: Provide targeted and temporary support, provided fiscal situation allows it.

*Source: IMF staff estimates and projections as presented in the West Bank and Gaza chapter tables and Risk Assessment Matrix.*

### Annex II. Debt Sustainability Analysis

### Annex II. Debt Sustainability Analysis

### Summary findings
- West Bank and Gaza’s government debt is unsustainable under unchanged policies.
- Gross public debt continues to rise over the medium term reaching almost 62 percent, a level that poses considerable challenges given the country’s narrow revenue base, uncertainties over the flow of clearance revenues, and weak economic growth hindered by Israeli restrictions including on the mobility of labor, goods and capital.
- High gross financing needs pose a significant challenge.
- A combined macro-fiscal shock and a political unrest shock would push debt above 80 percent of GDP by 2027, while gross financing needs would increase by almost 9 percent of GDP by 2027 relative to the baseline.

### Structure of public debt
- 2021 developments:
  - Gross public debt increased by 3.3 percentage points in 2021 reaching 50.4 percent of GDP.
  - The change in debt incorporates an increase due to the inclusion of promissory notes (estimated at 2.0 percent of GDP) in the stock of debt. Excluding the stock of promissory notes, gross public debt increased by 1.3 percentage points of GDP.
  - Staff estimates suggest that the increase in nominal GDP by 9 percent in 2021 contributed to a reduction in the stock of debt (excluding promissory notes) by 3.9 percent of GDP in 2021, while the change in the numerator added 5.2 percent of GDP to the stock of debt.
- Composition at end-2021 (in percent of GDP):
  - Gross debt liabilities: 50.4
  - Domestic debt: 43.3
  - Loans and overdrafts: 13.5
  - Promissory notes: 2.0
  - Arrears: 27.8
  - External debt: 7.1
- Domestic vs external:
  - Domestic debt (including arrears and promissory notes) represented 86 percent of total debt at end-2021.
  - Arrears are the largest component of domestic debt, representing more than double the amount of bank debt.
  - About half of the arrears were to the pension fund and represented unfunded liabilities.
  - External debt represented about 14 percent of total debt. Some 86 percent of foreign debt is long term.
  - Largest external creditors: Al Aqsa Fund (39 percent of external debt), World Bank (about 20 percent), Qatar National Bank (about 20 percent); bilateral creditors (Italy, Spain) account for about 12 percent of external debt.
- Uncertainties in debt stock:
  - The stock of arrears is not audited.
  - Policy since November 2021 of paying only partial salaries to public sector employees has led to the accumulation of wage arrears of 1.2 percent of GDP at end-June 2022.
  - Staff’s preliminary estimates suggest that the total stock of promissory notes (PNs) at end-2021 was 2 percent of GDP but there is considerable uncertainty surrounding this estimate.
  - In 2022, the PA paid banks $160 million (0.9 percent of GDP) to eliminate the stock of PNs held by banks. The outstanding stock of PNs is expected to be paid off fully by end-2024.
- Financing practices and assumptions:
  - Arrears are assumed to be the main source of new financing because domestic bank financing is limited and the government cannot issue securities in domestic or international markets.
  - For the purpose of the DSA, arrears to suppliers and contractors are assumed to accrue interest of 5 percent annually (i.e., a similar rate to bank loans).
  - The DSA includes a contingent liability shock in which the debt stock in 2022 is 5 percent of GDP higher than currently projected.

### Macroeconomic outlook (baseline)
- Growth and inflation:
  - The economy is expected to weaken over the medium term, with annual growth falling to 2 percent.
  - Inflation is expected to rise in the near term and gradually converge to near 2 percent, broadly in line with Israel’s inflation target.
- Public finances:
  - Public finances should improve in the near term as the authorities unwind some of the COVID-19 stimulus.
  - Over time, under unchanged policies, the fiscal deficit is projected to rise to 4–4 ½ percent of GDP.
- Fiscal risks to the baseline forecast include:
  - Possibility of political unrest that would harm growth.
  - Higher-than-expected deductions of clearance revenues related to prisoner payments.
  - A stock of arrears that may be larger than currently estimated.

### Debt sustainability projections and vulnerabilities
- Baseline projection:
  - Under the baseline scenario, gross public debt is projected to increase to about 62 percent of GDP by 2027.
  - The rate of increase is about 11 percentage points of GDP over six years (2022–27 cumulative change in gross public sector debt is 11.4).
  - Public gross financing needs projected:
    - 2020: 9.5
    - 2021: 17.1
    - 2022: 17.4
    - 2023: 16.0
    - 2024: 15.1
    - 2025: 14.9
    - 2026: 19.3
    - 2027: 19.1
  - Effective interest rate (defined as interest payments divided by debt stock at the end of previous year):
    - 2020: 1.4
    - 2021: 0.9
    - 2022: 1.6
    - 2023: 1.8
    - 2024: 2.3
    - 2025: 2.7
    - 2026: 3.0
    - 2027: 3.2
- Identified debt-creating flows (projections, cumulative 2022-27):
  - Change in gross public sector debt: 11.4
  - Identified debt-creating flows: 10.5
  - Primary deficit (cumulative 2022-27): 19.0
  - Primary (noninterest) revenue (cumulative 2022-27): 156.7
  - Primary (noninterest) expenditure (cumulative 2022-27): 175.7
- Automatic debt dynamics contributions (selected years):
  - Interest rate/growth differential contribution cumulative 2022-27: -8.6
  - Real interest rate contribution cumulative 2022-27: -0.6
  - Real GDP growth contribution cumulative 2022-27: -7.9

### Stress scenarios and sensitivities
- Growth and shock outcomes by 2027 (selected):
  - A growth shock would push public debt to 76 percent of GDP by 2027.
  - A combined macro-fiscal shock (growth shock plus temporary fiscal deterioration) results in public debt of 82 percent of GDP by 2027.
  - A contingent liability shock (one-time upfront increase in the stock of debt related to arrears plus lower growth and higher funding costs) pushes debt to 77 percent of GDP by 2027.
  - A “political unrest” shock suggests that a temporary but sizeable shock can lead to a sharp deterioration in the debt outlook.
- Stress-test assumptions and selected paths (figures summarize DSA scenarios):
  - Baseline real GDP growth path: 2022: 4.0; 2023: 3.5; 2024: 2.4; 2025: 2.0; 2026: 2.0; 2027: 2.0
  - Baseline inflation (GDP deflator) path: 2022: 4.9; 2023: 3.4; 2024: 2.7; 2025: 2.5; 2026: 2.2; 2027: 2.0
  - Selected stress-test examples:
    - Real GDP Growth Shock scenario real GDP growth path: 2022: 4.0; 2023: -2.1; 2024: -3.2; 2025: 2.0; 2026: 2.0; 2027: 2.0
    - Combined Macro-Fiscal Shock scenario real GDP growth path: 2022: 4.0; 2023: -2.1; 2024: -3.2; 2025: 2.0; 2026: 2.0; 2027: 2.0; primary balance path includes larger deficits in shock years (e.g., 2023 primary balance -4.4, 2024 primary balance -7.6 in the combined shock).
    - Contingent liability shock scenario real GDP growth path: 2022: 4.0; 2023: 2.5; 2024: 1.4; 2025: 1.0; 2026: 1.0; 2027: 1.0 and effective interest rates higher (e.g., 2024: 4.1; 2025: 4.7; 2026: 5.0).
- Risk assessment highlights:
  - The DSA heat map and risk indicators show vulnerabilities in debt profile, gross financing needs, and sensitivity to shocks.
  - Gross financing needs benchmark of 15 percent of GDP is exceeded under baseline and many shock scenarios.
  - Evolution of predictive densities indicates wide percentile dispersions for gross nominal public debt under alternative distributions and restrictions.

### Key statistics and underlying assumptions (selected)
- Historical and projection highlights:
  - Nominal gross public debt (percent of GDP): 2019: 32.0; 2020: 47.1; 2021: 50.4; 2022–2027 projected rising to 61.7 by 2027.
  - Real GDP growth: 2020: -11.3; 2021: 7.1; projected 2022–27 as above.
  - Nominal GDP growth: 2020: -12.5; 2021: 9.0; 2022: 9.1; 2023: 7.0; 2024: 5.2; 2025: 4.6; 2026: 4.3; 2027: 4.1.
  - Effective interest rate (see projection table above).
- Definitions and methodological notes:
  - Debt coverage includes accounts payable and pension liabilities in line with the IMF’s Public Sector Debt Statistics: Guide for Compilers and Users (2013).
  - Public sector is defined as central government.
  - The effective interest rate is defined as interest payments divided by debt stock (excluding guarantees) at the end of previous year.
  - Automatic debt dynamics derived as specified in footnote 5 of the DSA.
  - Residual includes asset changes and interest revenues; for projections, includes exchange rate changes during the projection period.
  - The DSA uses the 2021 Market Access Countries DSA template developed by the IMF; it is based on preliminary data at end-2021, and estimated and actual 2021 debt flow data.

*Prepared by Iacovos Ioannou; IMF staff estimates and DSA projections as presented in Annex II. Debt Sustainability Analysis.*

### Annex III . IMF Technical Assistance to the

### Annex III . IMF Technical Assistance to the Palestinian Authority, 2017–22

### Overview and medium-term priorities
- IMF provided TA to West Bank and Gaza (WBG) on public financial management (PFM), revenue administration, banking regulation and supervision, stress testing, anti-money laundering and combating the financing of terrorism (AML/CFT), national accounts, and external sector statistics.
- Technical support was provided to the Ministry of Finance (MoF)’s macro-fiscal and large taxpayer units in 2018–19.
- Priorities for capacity building over the medium-term include banking supervision, the development of the national payments system, and AML/CFT.
- Periodic review and assistance to improve the quality of external sector and national accounts statistics are needed.
- LEG, MCM and STA will continue to provide TA on these topics, with support from METAC.
- FAD is re-assessing current fiscal sector TA needs and priorities with the authorities and tentatively plans to deliver TA on expenditure reform, taxation, macro fiscal planning and cash management in 2022–23.

### Fiscal Sector: objectives, activities, and planned focus
- Key objectives in 2017–19:
  - Consolidate progress made in PFM in 2007–16.
  - Strengthen budget preparation and macro-fiscal forecasting.
  - Boost revenue mobilization by helping modernize tax administration.
- FAD TA resumed in 2022 after a three-year hiatus.
- Planned CD focus for the next two years:
  - Wage bill reform.
  - Net lending (within the context of the broader fiscal relations between the PA and municipalities).
  - Medium term budgeting and multi-annual commitment controls.
  - Cash management.
  - Revenue administration.

- Selected mission dates and TA report dates (Fiscal Sector):
  - April 3–13, 2017 — Budget Preparation and Macro-Fiscal Forecasting — May 2017
  - April 30–May 11, 2017 — Customs Risk Management — May 2017
  - August 27–31, 2017 — Operationalization of the PFM reform strategy — September 2017
  - September 4–13, 2017 — Budget Preparation and Macro-Fiscal Forecasting — October 2017
  - November 27–December 7, 2017 — Budget Preparation and Macro-Fiscal Framework — December 2017
  - April 8–19, 2018 — Supporting the Development of the Macro-Fiscal Unit’s Capacity — June 2018
  - August 12–19, 2018 — Supporting the Development of the Macro-Fiscal Unit’s Capacity — January 2019
  - October 28–November 8, 2018 — Supporting the Development of the Macro-Fiscal Unit’s Capacity — November 2018
  - February 17–28, 2019 — Supporting the Development of the Macro-Fiscal Unit’s Capacity — April 2019
  - March 10–21, 2019 — Revenue Administration/Large Taxpayer Office — March 2019
  - February 18–25, 2022 — Training on Improving Tax Compliance in Digital Economy — n.a.
  - March 14–17, 2022 — Virtual Regional Workshop on Public Sector Debt Statistics — n.a.
  - May 10–June 7, 2022 — Review of Revenue Administration Reform Strategies — n.a.
  - June 1–14, 2022 — Strengthening Quarterly Macro Fiscal Reporting — n.a.

### Monetary and Financial Systems: focus and missions
- 2017–18 TA focused on implementing IFRS9 and preparing for the transition to Basel III.
- MCM TA priorities for 2019–22 were informed by the Financial Sector Stability Review (FSSR) conducted in 2018 and its TA roadmap.
- 2019–22 TA centered on:
  - Bolstering crisis management arrangements.
  - Strengthening banking resolution provision and tools.
  - Improving stress-testing to reflect WBG financial sector specificities and test for multi-factor shocks.
- TA planned/provided in 2022–23 on AML/CFT ahead of and after the MENAFATF evaluation.
- Selected mission dates and TA report dates (Monetary and Financial Systems):
  - May 19–22, 2017 — Workshop to develop the CFT legal framework of West Bank and Gaza (in Amman, Jordan) — n.a.
  - September 24–October 3, 2017 — Implementation of IFRS9 — December 2017
  - February 25–March 8, 2018 — Implementation of IFRS9 — March 2018
  - March 14–23, 2018 — Financial Stability/Stress-Testing — March 2018
  - July 1–5, 2018 — Implementation of IFRS9 — November 2018
  - September 23–27, 2018 — Basel III — n.a.
  - October 17–November 1, 2018 — Financial Sector Stability Review (FSSR) — May 2019
  - March 3–7, 2019 — CFT framework — n.a.
  - March 24–28, 2019 — Basel III — n.a.
  - December 3–12, 2019 — FSSR Follow-up: Contingency Planning for Crisis Preparedness and Management* — July 2020
  - January 3–31, 2021 — FSSR Follow-Up: Financial Institution Restructuring & Resolution* — October 2021
  - April 26–May 6, 2021 — Macro Stress-Testing — n.a.
  - June 18–September 29, 2021 — Macro Stress-Testing* — n.a.
  - May 3–7, 2021 — FSSR Follow-Up: Financial Institution Restructuring & Resolution* — October 2021
  - January 9–February 6, 2022 — Developing a Crisis Management Plan* — n.a.
  - March 2–17, 2022 — Bank Resolution Law Reform* — n.a.
  - March 21–April 29, 2022 — National Payment Systems* — n.a.
  - May 8–11, 2022 — AML/CFT* — n.a.
  - June 26–July 5, 2022 — Strengthening On-Site Risk Based Supervision — n.a.

### Statistics: achievements and remaining needs
- TA focused on implementing and aligning statistical compilation and dissemination systems with the latest international statistical standards for national accounts and external sector statistics (ESS).
- Transparency and timeliness of data from the Palestinian Central Bureau of Statistics, the MoF, and the PMA are on par with countries that maintain good data management and dissemination standards.
- Additional work needed to:
  - Improve data consistency in ESS.
  - Produce quarterly and annual chain-linked national accounts.

- Selected mission dates and TA report dates (Statistics):
  - May 7–11, 2017 — National Accounts — n.a.
  - November 12–16, 2017 — Price Indexes — March 2018
  - December 17–21, 2017 — National Accounts — October 2018
  - March 11–15, 2018 — National Accounts — July 2018
  - June 24–28, 2018 — National Accounts — October 2018
  - July 22–August 2, 2018 — External Sector Statistics — October 2018
  - December 16–20, 2018 — Price Statistics — April 2019
  - February 10–14, 2019 — National Accounts — April 2019
  - December 13–15, 2019 — National Accounts — February 2020
  - June 8–11, 2020 — Residential Property Price Indices — August 2020
  - August 9–13, 2020 — Compilation of Input-Output Tables — September 2020
  - February 21–25, 2021 — Re-Chain Linking the National Accounts — April 2021
  - August 22–September 2, 2021 — Institutional Sector Accounts – Sequence of Accounts — November 2021
  - February 27–March 10, 2022 — Institutional Sector Accounts – Sector Accounts — April 2022
  - June 26–July 7, 2022 — Balance of Payments — n.a.
  - July 24–August 4, 2022 — Annual National Accounts — n.a.

*Reports marked with an asterisk are classified as confidential or strictly confidential.*

*Source: Annex III . IMF Technical Assistance to the Palestinian Authority, 2017–22.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1wbgea2022002.pdf_