The budget deficit in 2018 was 3.1% of GDP, not 2.9%, as reported by the Minister of Finance Moshe Kahlon on January 6, according to a summary of the balance of payments published today by the Central Bureau of Statistics. The deficit target for 2018 was 3% of GDP.
The main reason for the difference was a change in the accounting records for state spending last year by Accountant General Rony Hizkiyahu. Following Hizkiyahu's change, state spending on vacating IDF camps was not counted as spending in the calculation of the deficit. The Central Bureau of Statistics, which uses a different method to calculate the deficit, did not change the calculation rules. Hizkiyahu's predecessor as Accountant General, Michal Abadi-Boiangiu, opposed changing the method for calculating spending.
According to the figures published by the Central Bureau of Statistics, the 2018 deficit of government and National Insurance sector was 3.08%, while the total public sector deficit was 3.26%. The deficit is three times as much as in 2017, when the government deficit was 1.03% of GDP and the total deficit was 0.95%, as a result of a budget surplus in the local authorities and national institutions.
The Central Bureau of Statistics today published the balance of payments for 2018 showing that the 2018 current account surplus grew 10% to $11 billion, compared with $10.1 billion in 2017 and $12.3 billion in 2016.
The most encouraging figure in the current account was continued growth in direct investments by foreign residents in Israel, which climbed from $12.0 billion in 2016 to $18.2 billion in 2017 and $21.8 billion in 2018. Exports of goods and services grew 7% to $110.6 billion in 2018, while imports of goods and services rose 10.6% to $107.8 billion.
Published by Globes, Israel business news - en.globes.co.il - on March 10, 2019
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