7.3 billion shekels owed to employees by the government until October 2025

The public debt and arrears have reached approximately 46.5 billion shekels

SadaNews special: Recent data from the Palestinian Ministry of Finance has revealed that the accumulated dues of public sector employees owed by the government have reached approximately 7.3 billion shekels by the end of last October.

The Ministry of Finance indicated to "SadaNews" that the total public debt and arrears accumulated by the government until the end of last October have reached approximately 46.5 billion shekels, amid the deepest financial crisis hitting the Palestinian Authority as Israel continues to withhold clearance funds that constitute about 68% of the total revenues of the public treasury.

According to data reviewed by "SadaNews", the dues of the private sector had reached approximately 6.7 billion shekels by the end of October, while local borrowing amounted to about 11.2 billion shekels and external borrowing to about 4.4 billion shekels. Other debts are recorded in favor of the Palestinian retirement fund and other entities.

The Palestinian Authority is experiencing its worst financial crisis since its establishment, being unable to fully meet its obligations, whether in paying employees' salaries in full or in providing services in various sectors.

The monthly expenses of the Palestinian government are approximately 1.5 billion shekels, of which one billion and fifty million shekels is the salary and wage bill for employees and retirees, as well as expenses for social cases.

Despite improvements in securing external assistance for the public treasury over the past two years, this has only allowed the Palestinian Authority to pay limited salary payments for two reasons: first, the decline in the economic cycle in Palestine due to the war and its repercussions, which has caused local revenues to drop from about 400 million shekels per month to about 250 million shekels per month; second, the increase in Israeli deductions from clearance funds after October 7, 2023, after Israel imposed new deductions concerning allocations to the Gaza Strip, which amount to about 270 million shekels per month. Only 30-35% of those funds are now transferred from clearance funds, especially since there have been Israeli deductions imposed since 2019 concerning the salaries of the families of martyrs, the wounded, prisoners, and released prisoners, amounting to around 52 million shekels monthly.

For six months, Israel has completely stopped transferring clearance funds under the pretext of "punishing" the Palestinian Authority for international recognitions of the state of Palestine.

Recent data released by the Palestinian Ministry of Finance published by "SadaNews" indicated that the public treasury of the Palestinian Authority has lost about one-third of its revenues after nearly two years of the Israeli war launched against the Gaza Strip following the attack on October 7.

The total public revenue on a cash basis during the first nine months of this year was approximately 8.79 billion shekels, an increase of 4.1% compared to the same period last year, but it fell by 32.4% compared to the same period in 2023, before the war, when the total public revenue on a cash basis during the first nine months of last year was 8.43 billion shekels, while in the corresponding period of 2023, it only amounted to about 13 billion shekels.

Prime Minister Dr. Mohammad Mustafa previously noted that Israel's withholding and deducting of approximately 13 billion shekels from clearance funds is the main reason exacerbating the financial crisis faced by the Palestinian Authority.