Palestine Current Account Deficit Narrows in Q1

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.

Palestine recorded a current account deficit of USD 750 million in the third quarter of 2025, narrowing from USD 870 million in the corresponding quarter of the previous year. The trade balance deficit for goods contracted to USD 1,105 million from USD 1,333 million a year ago, in addition to the services balance shortfall, declining to USD 214 million from USD 263 million. At the same time, the net income surplus widened to USD 307 million from USD 275 million, supported by higher compensation for Palestinian workers in Israel and increased foreign investment income, mainly resulting from interest earned on Palestinian deposits in foreign banks. Meanwhile, surplus in the net current transfers from abroad fell to USD 262 million from USD 451 million, due to lower transfers to government and other sectors.