Palestine Current Account Deficit Narrows in Q4

Palestine’s current account deficit widened to USD 739 million in the second quarter of 2026 from USD 665 million in the corresponding quarter a year ago. This marked the largest deficit since Q1 2025, as the goods account deficit increased to USD 1,648 million from USD 1,075 million. On the other hand, the services account deficit narrowed significantly to USD 85 million from USD 210 million, while the next current transfers from abroad rose to USD 717 million from USD 425 million a year earlier. The net income surplus also grew to USD 277 million from USD 195 million, driven largely by higher compensation for Palestinian workers in Israel (USD 209 million vs USD 140 million) and increased foreign investment income, mainly from interest earned on Palestinian deposits from foreign banks (USD 101 million vs USD 93 million).

Palestine’s current account deficit narrowed sharply to USD 440 million in the first quarter of 2026 from USD 963 million in the corresponding quarter of the previous year. The services account deficit significantly decreased to USD 81 million from USD 263 million. On the other hand, the goods account deficit expanded by USD 183 million to USD 1,523 million from USD 1,340 million, while the surplus in net current transfers from abroad also rose to USD 893 million from USD 387 million a year earlier. Additionally, the net income surplus increased to USD 271 million from USD 253 million, driven largely by higher compensation for Palestinian workers in Israel, while gains were partially offset by a decrease in foreign investment income, mainly from interest earned on Palestinian deposits from foreign banks.

Palestine recorded a current account deficit of USD 337 million in the fourth quarter of 2025, narrowing from USD 480 million in the corresponding quarter of the previous year. The net income surplus widened to USD 323 million from USD 289 million, supported by higher compensation for Palestinian workers in Israel and increased foreign investment income, mainly from interest earned on Palestinian deposits in foreign banks. The surplus in net current transfers from abroad also rose to USD 740 million from USD 516 million, due to lower transfers to the government and other sectors. Meanwhile, the goods account deficit widened to USD 1,173 million from USD 1,075 million a year ago, while the services balance shortfall increased to USD 227 million from USD 210 million.