Preliminary Data of the Balance of Payments During the Fourth Quarter of 2025 Indicate Continued Deficit in the Current Account

SadaNews - The Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority have issued the preliminary results of the Palestinian Balance of Payments for the fourth quarter of 2025, as part of the periodic joint publication of the Palestinian Balance of Payments, which represents a continuation of the joint efforts undertaken by the two institutions. It is worth noting that the data does not include that part of the Jerusalem Governorate which was forcibly annexed by the Israeli occupation following its takeover of the West Bank in 1967.

The preliminary data for the Balance of Payments for the fourth quarter of 2025 indicate a continued deficit in the current account (goods, services, income, and current transfers), amounting to approximately 337 million US dollars, representing a decrease of 55% compared to the previous quarter. The trade balance deficit reached 1,173 million US dollars, while the service balance deficit amounted to 227 million US dollars.

The data indicate an increase in net income account during the fourth quarter of 2025 by 5% compared to the previous quarter, with a value of 323 million US dollars. Compensation for Palestinians working in Israel rose by 8% compared to the previous quarter, reaching 172 million US dollars, while income from investments received from abroad declined by 14% to reach 140 million US dollars, mainly due to interest earned on Palestinian deposits in foreign banks.

Increase in Net Current Transfers from Abroad During the Fourth Quarter of 2025 by Approximately Twice Compared to the Previous Quarter

The data indicate a 182% increase in net current transfers, amounting to 740 million US dollars compared to the previous quarter, where the value of current transfers from abroad to the government sector reached 462 million US dollars. Meanwhile, transfers to other (non-governmental) sectors increased by 31% compared to the previous quarter. It is noted that government sector current transfers constituted 58% of the total current transfers from abroad, while current transfers to other sectors represented 42%. It is noteworthy that transfers from donor countries account for approximately 83% of the total current transfers from abroad.

The preliminary results of the Balance of Payments also indicated a deficit in the capital and financial account amounting to 62 million US dollars, due to the deficit recorded in the financial account of 182 million US dollars. In contrast, the reserves held by the Palestinian Monetary Authority recorded an increase of 494 million US dollars during this quarter, compared to a decrease of 93 million US dollars in the previous quarter.

It is important to note that the Balance of Payments is considered the tool that determines the economic position of the state in relation to the external world and the size of external debt, assisting researchers and decision-makers in extracting appropriate economic policies and developmental plans to achieve external balance, ensuring the state achieves stability and economic growth. It is acknowledged that the latest international recommendations were relied upon in preparing the Palestinian Balance of Payments data, taking into consideration the uniqueness of the Palestinian situation.