Meeting of the Aix Group steering committee. From left to right: Dr. Samir Hazboun, Prof. Arie Arnon, Prof. Gilbert Benhayoun, Mr. Saeb Bamya, Dr. Ron Pundak.

An Israeli government report says the Palestinian Authority is not economically stable enough for statehood.

In a report released on Saturday, the International Monetary Fund projected that if donor countries continued to withhold promised aid, and if last year’s budget deficit of $1.1 billion were to recur this year, the PA would find itself with a budget shortfall of $500 million.

Citing commitments to rein in expenditures and put forward a leaner budget, Palestinian officials foresee a $950 million total deficit and $330 million financial gap.