The Ministry of Finance(MOF) &Palestinian Central Bureau of Statistics (PCBS) have announced the results of the general government finance for Palestine for the year 2020

USD 5,064.4 million the total of gross expenses of General Government, against USD 4,444.6 million of total of revenues.

The Ministry of Finance and Palestinian Central Bureau of Statistics (PCBS)  have announced the results of the general government finance for Palestine for the year 2020. The general government finance statistics were prepared according to the Government Finance Statistics Manual (GFSM 2001) issued by the International Monetary Fund in 2001.

The general government sector consists of many sub sectors; mainly, the central government that includes all government institutions that work as agencies or bureaus of the central authority and the local government which includes municipalities, village councils and project committees.

Gross expenses of the general government amounted to USD 5,064.4 million includes current and capital expenses

Gross expenses (current and capital) of the general government amounted to USD 5,064.4 million in the year 2020, out of which USD 4,894.4 million was current expenses, whereas capital expenses (net acquisition of non-financial assets) amounted to USD 170.0 million.

The gross expenses of the central government amounted to USD4,674.6  million, distributed as follows: 48.8% compensations of employees (salaries of civil and military employees and social contributions), 27.2% social benefits, 17.1% expenses on use of goods and services, 2.6% interest, 1.0% other expenses, 0.3% subsidies, and 0.1% grants. While capital expenses (net acquisition of non-financial assets) represented 2.9% of the value of gross expenses of the central government.

In the same context, the amount of local government (municipalities, villages councils and projects committees) gross expenses amounted to USD 390.6 million in the year 2020, distributed as follows: 25.7% compensations of employees (salaries of employees), 48.9% use of goods and services,  2.4% consumption of fixed capital, 11.1% other expenses such as (insurance and maintenance of vehicles, workers allowances, expenses for executing local projects, promotional discounts to repay debts), 2.0% social benefits, 0.7% grants, While capital expenses constituted 9.2% of the total amount of local government expenses.

Value of general government revenues amounted to USD 4,444.6 million, out of which 11.8% are foreign grants and aids

The value of general government revenues amounted to USD 4,444.6 million in the year 2020, out of where 90.9% was central government revenues, of which 80.2% was tax revenues, 12.6% were grants and aids, and 7.2% were other revenues.

The results also highlighted that the value of local government (municipalities, villages councils and projects committees) revenues amounted to USD 406.3 million in the year 2020 (9.1% of general government revenues); distributed as follows: 76.3% other revenues (which include sales of water and electricity to the public), 19.1% taxes, 3.6% grants,  and 1.0% social contributions.

Net Operating Balance for general government achieved Deficit amounted to USD 449.8 million

The net operating balance is calculated by subtracting current expenses from total revenues. The deficit in operating balance amounted to USD 449.8 million in the year 2020. This showed that current expenses exceeded revenues by this amount.

Current expenses of the central government exceeded its Revenues by USD 501.6 million. In addition, the revenues of the local government exceeded its current expenses by USD 51.8 million.

Net Lending and Borrowing for general government achieved deficit amounted to USD 619.8 million

The net lending and borrowing is calculated by subtracting net acquisition of non-financial assets from net operating balance. The results showed that a deficit in net lending and borrowing amounted to USD 619.8 million in the year 2020.

Net acquisition of financial assets amounted to USD 352.8 million, against USD 963.3 million for net acquisition of  financial  liabilities

General government budget data showed that net acquisition of financial assets during the year 2020 amounted to USD 352.8 million, out of which USD 327.8 million was domestic, whereas foreign financial assets amounted to USD 25.0 million.  And the net acquisition of  financial  liabilities during the year 2020 amounted to USD 963.3 million. out of which USD 877.4 million was domestic, whereas foreign financial assets amounted to USD 85.9 million. 

Important note:

The general government finance statement is prepared according to GFSM 2001. Its methodology and  classification are different from that used to prepare the monthly published reports on fiscal operations which reflect the budget. 

It should be noted that in those reports, there is an item known as (net lending), which is a key component of the budget. According to the methodology of GFSM 2001, this item is considered as a financial asset not an expense; therefore, it has been excluded from expenses and included in the acquisition of financial assets.

General Government Finance in Palestine[1] for the year 2020