Israel's budget deficit narrows slightly

Shaul Meridor

Despite strenuous efforts to reduce expenditure, the budget deficit in the twelve months before October 31 was 3.7%, down from 3.8% at the end of September, the Finance Ministry reports.

The Israeli government's budget deficit has not fallen significantly. According to the latest Ministry of Finance figures, the budget deficit between November 2018 and October 2019 was 3.7% of GDP, a slight fall from 3.8% at the end of September. Without taking into account delayed tax payments, the accumulated deficit was 3.6%.

There had been expectations for a more significant fall in the budget deficit due to the strenuous efforts by Ministry of Finance officials to reduce government expenditure. For example, Ministry of Finance budget director Shaul Meridor had frozen NIS 2.6 billion from the 2018 budget surplus and released only half the sum at the beginning of November. Accountant General Rony Hizkiyahu had also weighed in by instructing accountants in his office not to approve new contracts or extend existing contracts except in extenuating circumstances.

Since the beginning of the year government ministries (not including the Ministry of Defense and Ministry of Public Security) have increased expenditure by 8.5%, instead of the planned 6%. Ministry of Defense expenditure has actually shrunk by 0.8% instead of a planned rise of 1.7%.

On the other hand, tax collection since the start of the year has risen by just 2.3%, although the Ministry of Finance estimates that tax payment totaling NIS 2.2 billion have been postponed from October to November, making the increase more like 3.1%. October tax payments were lower than usual because all the Jewish holidays fell in that month.

Published by Globes, Israel business news - en.globes.co.il - on November 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Shaul Meridor
Shaul Meridor
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