Revenues are also expected to drop by 21% due to the ongoing conflict in Gaza.

The announcement followed President Mahmoud Abbas’ approval of the emergency budget for 2024, which includes austerity measures such as reducing salaries, operational and capital expenditures, and maintaining minimal development expenditures.

The war has hindered the Palestinian administration’s ability to pay public sector salaries in full for over two years because of reduced aid and Israel withholding tax money. Israel recently transferred 435 million shekels (US$116 million) in early July, the first such transfer since April.

“The Israeli government has deducted about two-thirds of Palestinian tax revenues since October last year, amounting to a 3.4 billion shekel ($937.52 million) decline from the previous year,” the statement said.