The government deficit continues to shrink. The deficit fell to NIS 2.5 billion in August 2013 from NIS 4.5 billion in August 2012, the Ministry of Finance reported today.
The government deficit fell to NIS 12.9 billion in January-August from NIS 17.6 billion in the corresponding period of last year.
Minister of Finance Yair Lapid's bureau is hinting that, in view of the reduction in the deficit, as well as the change in the Central Bureau of Statistics' methodology for calculating GDP, tax cuts may be contemplated in the coming months. "Fiscal discipline is starting to have an effect. We continue to behave responsibly. The Ministry of Finance is examining the significance of the change in the Central Bureau of Statistics' methodology for calculating GDP. The Minister of Finance welcomes the apparent trend of a fall in the deficit, in light of the difficult situation that he inherited."
Lapid adds, "It is necessary to maintain fiscal discipline to avoid returning to the serious budget deficit situation." He also says that he and top ministry officials "are closely and continuously monitoring the data, and in the coming months, we will assess the situation in light of the budget data."
The Ministry of Finance says that the reduction in the deficit over the preceding 12 months continued in August. The deficit in the 12 months through August was NIS 34.3 billion, 3.3% of GDP, under the Central Bureau of Statistics' new methodology. The deficit was 3.9% in 2012 under the new methodology, compared with 4.2% under the older methodology. The cumulative deficit rose in January and February, but has been steadily falling since March.
From August, the government has been operating under the budget that the Knesset approved in late July. Expenditures (excluding principal payments) totaled NIS 23.3 billion in August, of which NIS 20.4 billion was spent by ministries, and NIS 2.9 billion was in interest payments.
Spending by ministries totaled NIS 155.9 billion in January-August, 4.8% more than in the corresponding period of last year, compared with the 8.8% planned annualized increase in the approved budget for 2013 over the budget performance in 2012. Spending by civilian ministries rose by 5.9%, and spending by the Ministry of Defense rose by 1.6%.
Tax revenues rose to NIS 18.6 billion in August from NIS 17 billion in the corresponding month, and rose to NIS 158.9 billion in January-August from NIS 146.6 billion in the corresponding period.
Capital market taxes totaled NIS 235 million in August, 44% more than in the August last year. Land taxes totaled NIS 654 million in August, 12% more than in the August last year.
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2013
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