World Bank: economic performance in the West Bank below their potential

An updated macroeconomic forecast for the Palestinian Authority ( PA ) published last week by the World Bank, provided, on the one hand an insight to the flow of money to the PA and on the other hand a highly pessimistic forecast for the next two years.
 
The report which was published by the World Bank economic research unit, predicted that economic performance in the West Bank and Gaza Strip would be far below their potential.
 
World Bank economists predicted that the GDP in 2005 will be $3.93 billion (5.7% higher than in 2004), and GDP per capita will be $1,119. The unemployment rate in the PA is expected to reach 25%, and the poverty rate is expected to reach 45%.
 
The report pointed out at an even worse scenario arguing that unless the economic and security circumstances in the region change, in 2007 the GDP per capita in the PA will fall to $1,063, the unemployment rate will surge to 31%, and the poverty rate to 50%.
 
The World Bank report noted that the financial situation of the PA continues to be a major hurdle.
 
In January-August 2005, average revenues per month were $99 million. Monthly revenues included an average of $32.8 million from domestic revenues, and $61 million a month in transfers (customs duties & vat) from Israel.
 
In practice, however, the available monthly revenues, after deducting debts to Israeli suppliers, is around $70.2 million.
 
The Authority's monthly expenditure is about $122.80 million, including $80.1 million in salaries alone. Hence the monthly deficit runs at $52.63 million.
 
This deficit is supposed to be covered by foreign donors, mostly from Arab countries.