$610.7 Million deficit value of current account

The deficit value of the Current Account in the Palestinian Territory amounted to US$610.7 million (29.9% of the GDP in current prices for the second quarter of 2011), decreasing by 0.4% compared to the previous quarter, according to a joint report published Tuesday by the Palestinian Central Bureau of Statistics (PCBS) and Palestine Monetary Authority (PMA). The report said the deficit of Current Account was caused mainly by the deficit in the Trade Balance of goods which was $1,029.4 million (50.5% of the GDP in current prices), a decrease by 12.2% compared to the previous quarter. The deficit in Services Balance amounted to $68.4 million, increasing by 122.4% compared to the previous quarter, which was caused by the decrease of exports in Government Services, in addition to the increase of imports in Travel and Transportation Services, added the report. PCBS said the surplus in Income Balance (compensations of employees and investments income) amounted to $275.6 million, decreasing by 2.0% compared to the previous Quarter; this surplus was due to a surplus in Compensations of Employees working in Israel, which reached $241.0 million. Meanwhile, the received investments income amounted to $14.4 million, mainly caused by the interest received on Palestinian deposits in banks abroad, added the report. According to Net Current Transfers, the surplus value amounted to $211.5 million, registering a decrease of 31.4% compared to the previous quarter, said the report, adding that donors’ current transfers formed 47.8% of total value of receipts from abroad, while the private sector formed 61.5% of the total value. The surplus value of the Capital and Financial Account amounted to $676.8 million, caused mainly by the surplus in the Capital Account ($61.3 million), the surplus in donors’ capital transfers and the surplus in Financial Accounts (Direct Investments, Portfolio Investments, Other Investments, and Reserve Assets) which amounted to $615.5 milion. The report explained that the surplus of Financial Account was caused mainly by the surplus of Net Foreign Direct Investments ($61.3 million), the surplus of Net Foreign Portfolio Investments ($66.2 million) and the surplus of Net Foreign Other Investments ($393.6 million). The changes in Reserve Assets flows decreased, amounting to $94.4 million in PMA, which are reflected in the Overall Balance surplus in Palestine due to the absence of other financing resources, concluded the report. The Balance of Payments (BOP) is an account measuring transactions between residents and non-residents in a given period. It is considered to be the peak of efforts in preparing systematic economic statistics that are necessary for observing economic performance in general, and for deriving essential data used in compiling the Rest of the World Account as part of the Palestinian National Accounts. BOP consists of two main accounts, the Current Account and the Capital and Financial Account.