Decrease by over 15% in current account deficit in second quarter to reach $373.3 million

An incessant deficit in the Current Account (goods, services, income, current transfers) in the second quarter of 2018, which totaled $373.3 million marking a decrease of 15.6% compared to the previous quarter, was mainly triggered by the deficit of the trade balance of foods, which reached $1,178.9 million, as well as the deficit in services balance, which  amounted to $248.3 million, a joint Palestinian Central Bureau of Statistics (PCBS) and Palestine Monetary Authority (PMA) report said on Wednesday.

The preliminary results of the Palestinian Balance of Payments for the second quarter of 2018 also showed:

• The decrease in deficit of the Current Account mainly triggered by the increase of current transfers of donors to government sector by 200.9% compared to the previous quarter.

• The surplus in Income Account (compensations of employees and investments income) amounted to $603.7 million with an increase of 6.1% compared to the previous quarter. This surplus was due to compensations of the employees working in Israel, which reached $568.3 million. As for the received investments income, it amounted to $64.1 million and was mainly caused by the income received on the portfolio investments abroad, in addition to the interest received on the Palestinian deposits in banks abroad.

• The Current Transfers achieved a surplus value amounted to $450.2 million with an increase of 29.3% compared to the previous quarter. This was due to the increase of the transfers of donors to the government sector. The transfers to the government sector contributed with 30.1% of total transfers from abroad, while the transfers to other sectors were 69.9%. The donors’ current transfers constituted 30.8% of total transfers from abroad.

• The preliminary results showed a surplus value for the Capital and Financial Account amounted to $288.3 million, the surplus in the Capital and Financial Account was mainly caused by the surplus in the Capital Account which reached $77.8 million, and the surplus in Financial Account which amounted to $210.5 million. There was a decrease in the reserve assets at PMA amounted to $28.8 million, compared to an increase of $106.6 million in the previous quarter.