Tranlated by Sabrin Qadah 

The International Monetary Fund showed its pessimism about the future of the next financial aid to the Palestinian treasury, and expected a further decline in volume during the coming period.

The head of the International Monetary Fund of the Palestinian territories Mission “Karen Ungli” said: "The most prominent current risk facing the Palestinian economy is the sharp decline in external financial grants general budget, according to an email issued by the Fund, on Tuesday.

Ungli added: "It is likely to see a further sharp decline in donor aid to the Palestinian Authority, particularly with competing demands to help the refugees, and parts of the region affected by the conflict, and another decline in oil prices which restrict the budgets of donors."

The head of the IMF mission pointed out that the decline in donor funds to the Palestinian Authority could push the latter to reduce the next general budget, “and this would be detrimental to growth rates.”

She also added: "even the political status quo, it constitutes a serious constraint to increase growth, and undermines our future Palestinian economy. However, there are some bright spots, most notably improving economic cooperation between the Israeli government and the Palestinian Authority". Moreover, many meetings were held between representatives of  the Palestinians authority and Israeli officials in the past two years and the ongoing in order to improve the way the Palestinian authority collects taxes on goods coming from Israel or through it, where the Israeli Ministry of Finance collects taxes on goods imported by the Palestinian authority and then turned on a monthly basis to the Palestinian treasury.

Ungli sees "that one of the challenges faced by the Palestinian Authority is "that the Palestinian economic growth is incapable of generating jobs, or raising the average of the Palestinian income to improve it.”

The IMF expects that the Palestinian economy to record a growth rate of 3.3% for the current year. "This percentage may look good for other countries in the world, but in the Palestinian case, it is not, because the unemployment rate there is close to 30% and two-thirds of young people don’t work, “according to Ungli.

It mentions that the Palestinian Authority is not a member of the International Monetary Fund, so the role is limited to providing technical assistance and consultation to the government and financial institutions, away from any loans or grants provided by the Fund to the Palestinians.

The IMF and the World Bank gave papers on the sidelines of the donor meetings held in New York City on last Sunday about the reality of the Palestinian economy and the challenges it faces.