Initial Reading of Government Revenues and Expenditures in Palestine, 2018 — Part One

· Part One: Government Revenues and Expenditures in Palestine 2018

- The statistical tables and financial statements were posted on the electronic page of the Ministry of Finance and Planning in Palestine: the actual figures for government financial operations for 2018…and the budget—estimated—for the same year. Table No. 2 in the statistical data showed that total net actual revenues in 2018 amounted to 12,408 million shekels (twelve billion four hundred eight shekels), a decrease of 1,097 million shekels from the total net revenues in the 2018 budget—estimated—(92% achieved): i.e., the ratio of actual to the budget—estimated— for 2018.

- Public revenues consist of domestic revenues in their tax and non-tax components, in addition to clearance revenues. The total value of actual domestic revenues in 2018 amounted to 4,816 million shekels, an increase of 283 million shekels over the domestic revenues stated in the 2018 budget (106% achieved). Actual domestic revenues for 2018 consisted of tax revenues of 2,997 million shekels, non-tax revenues of 1,545 million shekels, and earmarked collections of 274 million shekels (meaning taxes and revenues allocated to Local Government Institutions, 90% of property tax and 50% of transport and communications taxes).

- As for the clearance revenues, their actual value in 2018 amounted to 8,092 million shekels, a decrease of 1,066 million shekels from the figures shown in the 2018 budget—estimated—(88% achieved).

- As for total actual public expenditures for 2018, they amounted to 13,134 million shekels (thirteen billion one hundred thirty-four million shekels), a decrease of 3,046 million shekels from total public expenditures as shown in the 2018 budget—estimated—(81% achieved).

- Under the heading of total public expenditures are the items of those expenditures. The value of actual (salaries and wages) in 2018 amounted to 5,946 million shekels, representing 45% of total public expenditures, a decrease of 1,932 million shekels from the 2018 budget figures—estimated—(81% achieved). The value of actual (social contributions—governmental—) for 2018 amounted to 214 million shekels, or 2% of total public expenditures.

- As for the value of actual expenditures for (use of goods and services) in 2018, they amounted to 1,543 million shekels, representing 12% of total public expenditures, a decrease of 543 million shekels from the amount stated in the 2018 budget—estimated—(74% achieved).

- (Net lending) in 2018 actually amounted to 967 million shekels, or 7% of total public expenditures, while it was estimated in the 2018 budget at 900 million shekels. (It is well known that net lending are the amounts that the Israeli occupation authorities deduct from the value of the clearance bill under the pretext of settling accumulated water, sewage and electricity bills owed by Palestinian local authorities).

- As for (transfer expenditures), their actual value in 2018 amounted to 4,016 million shekels, or 31% of total public expenditures, a decrease of 916 million shekels from the amount stated in the 2018 budget (81% achieved).

- As for (capital expenditures) — they amounted to 32 million shekels. As for (interest paid) in 2018 actually, it amounted to 246 million shekels, or 1% of total public expenditures, a decrease of 59 million shekels from the interest estimated in the 2018 budget. It is noteworthy that some observations were recorded regarding interest paid in 2018 actually: a deferred installment of interest on external debt to the World Bank was made… and most of the interest actually paid is on domestic debt and amounted to 243 million shekels. Also, amounts were shown as expenditures (earmarked payments) amounting to 166 million shekels actually, in addition to other amounts under the expenditure heading totaling 91 million shekels (as property tax). As for (transportation fees), their value was 75 million dollars…representing 2% of total public expenditures for 2018.

- As for (development expenditures), their actual value in 2018 amounted to 1,003 million shekels, a decrease of 906 million shekels from the amount stated in the 2018 budget (53% achieved).

- The cumulative total of arrears for 2018 amounted to 1,101 million shekels, and thus the net cumulative arrears amount to 2,836 million shekels, as shown in Table No. (4).
By tracking the difference between the value of actual figures for total net revenues for 2018 and the actual figures for total expenditures for the same year, it was found that the government fiscal deficit for 2018 amounted to (726) million shekels (−), which appeared in Table No. 2 of the aforementioned statistics under the name 'balance'… while the value of the government fiscal deficit in the 2018 budget—estimated—was (2,676 million shekels)(−). That is, it is lower than the fiscal deficit stated in the budget by 1,950 million shekels… (27% achieved).

- Based on the figures posted on the ministry’s electronic page — the Ministry of Finance — referred to above, the total government fiscal deficit becomes (1,729 million shekels) (−) after adding the development expenditures deficit of 1,003 million shekels to the current government fiscal deficit, which, as noted above, amounted to 726 million shekels.

- The total actual government deficit for 2018, amounting to (1,729 million shekels) (−), decreased from the total government deficit stated in the 2018 budget—estimated—of 4,584 million shekels, a decrease of 2,855 million shekels.

- As for financing sources, the statements showed that 'external budget support' amounted to 1,840 million shekels, while the external support for the budget had been estimated in the 2018 budget at 2,160 million shekels (85% achieved). The actual 'development financing' shown for 2018 amounted to 571 million shekels, while it was estimated in the 2018 budget at 630 million shekels (91% achieved). Net actual financing from local banks in 2018 amounted to 569 million shekels.

- The (total public debt) in 2018, as shown in Table No. (7), amounted to 2,369 million US dollars (two billion three hundred sixty-nine million US dollars). 'public debt' consists of 'domestic debt' and 'external debt.' Domestic debt amounted to 1,337 million dollars, of which short-term was 834 million dollars, while domestic long-term debt amounted to 504 million dollars.

- Domestic debt consists of 'loans from local banks' which amounted to 638 million dollars; short-term bank loans amounted to 134 million dollars, while long-term bank loans were 504 million dollars. In addition to 'banking facilities' which amounted to 448 million dollars, 'Petroleum Authority' loans amounted to 238 million dollars, in addition to loans from 'other public institutions' amounting to approximately 13 million dollars.

- As for 'external debt,' its value reached 1,032 million US dollars, of which external debt to 'Arab financial institutions' was 563 million dollars, debt to the 'Al-Aqsa Fund' was 513 million US dollars, the 'Arab Fund for Economic Development' debt was 14 million dollars, and the 'Islamic Development Bank' debt was 36 million dollars.

- As for debt to 'international and regional institutions' for 2018 actually, it amounted to 339 million dollars, of which 271 million US dollars were to the 'World Bank,' 44 million dollars to the 'Jordan Investment Bank,' 2 million dollars to the 'International Fund for Agricultural Development,' and 22 million dollars to OPEC, while the value of 'bilateral loans' was 129 million dollars — to Spain: 80 million of these bilateral loans and 49 million dollars to Italy.

- Date: 10-2-2019