Palestinians raise taxes, cut spending

RAMALLAH, West Bank, Jan. 9 (UPI) -- Palestinian Authority Prime Minister Salam Fayyad is cutting spending and raising taxes in attempts to reduce a $1.1 billion budget deficit, officials said.

Fayyad said the global financial crisis and the failure of donor countries to honor their aid pledges in 2011 increased the authority's deficit, which had been $350 million, the Ma'an News Agency reported Monday.

"We designed this year's budget expecting $1 billion of aid for running costs but we received only $720 million," he said.

"The treasury had to fund developmental projects worth $250 million from its general revenue because of insufficient funds from donor countries."