Palestinians face $400 million budget gap: World Bank
JERUSALEM (AFP) - The Palestinian Authority in the West Bank faces a US$400 million (S$489.3 million) budget shortfall, even if current donor pledges are met, the World Bank warned in a report on Wednesday, calling new funding "critical."
The 21-page report, prepared ahead of a meeting of international donors in New York next Monday, also accuses Israel of stifling Palestinian growth by impeding development in the West Bank's Area C, which is under full Israeli control.
The report warns of "a time of deepening fiscal crisis for the Palestinian Authority," and comes after cost-of-living protests in the West Bank that forced prime minister Salam Fayyad to slash VAT and fuel prices.
The PA's fiscal situation will "likely worsen by the end of 2012," the report says, noting a budgetary gap of approximately US$400 million - "if donor pledges are met."