Israel's fiscal deficit widened even further in June, reaching 7.6% of GDP over the past 12 months, or NIS 146 billion, the Ministry of Finance accountant general Yali Rothenberg reports, up from 7.2% of GDP at the end of May. The fiscal deficit is already a full 1% higher than the fiscal deficit target of 6.6% set by the government for the end of 2024 in the 2024 budget.
In June itself, the fiscal deficit stood at NIS 14.6 billion compared with NIS 6.4 billion in June 2023. Since the start of 2024, the fiscal deficit has totaled NIS 62.3 billion compared with a surplus of NIS 6.6 billion in the first six months of 2023.
Government spending since the beginning of the year has amounted to more than NIS 300 billion, up 34.2% compared with the corresponding period last year. The main increase in the deficit has been due to high spending on defense and by civilian ministries due to the war. However, even excluding war expenses, the increase in government spending is about 9.3%. This, in contrast to an increase of only about 3.3% in the state's revenues, which since the beginning of the year have amounted to about NIS 238 billion, compared with 230.4 billion in the first half of 2023.
The Ministry of Finance estimates that the deficit will climb to a peak by September, after which there will be a decline. The Ministry of Finance budget department believes that the deficit will converge downwards to the target of 6.6%, on the basis of which the state budget was approved last March.
Published by Globes, Israel business news - en.globes.co.il - on July 8, 2024.
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