The Finance Ministry's revised forecast is that 2019 will end with a budget deficit of 3.6% of GDP, almost NIS 10 billion in excess of the target.
Israel's budget deficit remained at a record 3.8% of GDP for the second successive month in July. This is the highest level that the deficit has been since 2014 in both absolute numbers and in terms of a percentage of GDP. The Ministry of Finance's revised forecast is that 2019 will end with a budget deficit of 3.6% of GDP, almost NIS 10 billion in excess of the budget target.
According to the data published today by the Ministry of Finance, there has been a moderation in the rapid growth rate of expenditure by government ministries, which have grown by 8.5% since the start of 2019. The planned growth rate for the budget in 2019 was meant to be 5.1% compared with 2018 - the difference between the planned performance has been gradually narrowing since April.
On the other hand, state revenues have risen by only 1.5% compared with last year. According to the Israel Tax Authority, tax collection grew by an annual average of 6% between 2013 and 2017. The Israel Tax Authority said that bringing car imports forward to April cost the government NIS 200 million in lost revenues in July.
Published by Globes, Israel business news - en.globes.co.il - on August 6, 2019
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Moshe Kahlon photo: Eyal Izhar