Deficit in current account in first quarter up by 45% and amounts to over $442 million

RAMALLAH, Preliminary results of the Palestinian Balance of Payments for first quarter of this year, 2018, showed an incessant deficit in the current account (goods, services, income, current transfers) totaling $442.1 million, marking an increase of 45.6% compared to the previous quarter, according to a joint report by the Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) published on Monday.

The increase was mainly triggered by the deficit of the trade balance of goods, which reached $1,123.6 million, as well as the deficit in services balance, which amounted to $235.7 million, and 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 $568.9 million with an increase of 4.5% compared to the previous quarter, said the report.

This surplus was due to compensations of the employees working in Israel, which reached $556.8 million. As for the received investments income, it amounted to $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 $348.3 million with a decrease of 35.3% compared to the previous quarter, added the report.

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 were 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 $612.3 million, which was mainly caused by the surplus in the capital account which reached $95.2 million, and the surplus in financial account which amounted to $517.1 million. There was an increase in the reserve assets at PMA amounted to $106.6 million, compared to an increase of $0.1 million in the previous quarter.

The Balance of Payments is used to determine the economic position of a country compared to other countries worldwide, and to calculate the size of its external debt. The data enables researchers and decision makers to devise economic policies and development plans to improve their external balance to guarantee the stability of the state and sustain the economic growth.

Source: Palestinian News & Info Agency