Israel's fiscal deficit widened to 1.3% of GDP at the end of August 2023, amounting to NIS 23.1 billion over the past 12 months, the Ministry of Finance Accountant General Division reports. Israel's fiscal deficit is now above the annual target of 1.1% set by the government when the budget was approved in May.
Israel's fiscal deficit has been rising fast from NIS 15.4 billion (0.9%) in the 12 months to the end of June 2023 to NIS 18.3 billion (1%) at the end of July and NIS 23.1 billion (1.3%) at the end of August.
The deficit has been widening from both sides, due to a decrease in state revenues and an increase in government spending. Since the start of 2023, state tax revenues have fallen by 4.3%, compared with the same period in 2022. At the same time government spending grew 9.4% in the first 8 months of 2023. The state budget took only into account an increase in government spending at a lower rate, of 7.6%.
The deficit in August itself totalled NIS 5.7 billion. Since the start of 2023, only June had a bigger deficit - NIS 6.2 billion. Since the beginning of 2023, there is still a small fiscal surplus of NIS 400 million, but it mainly originates from high surpluses totaling more than NIS 14 billion that were received January, and have eroded since then.
Published by Globes, Israel business news - en.globes.co.il - on September 10, 2023.
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