Israel's economy continues to recover and its fiscal deficit continues to decline as government revenues increase sharply, trhe Ministry of Finance reports. The cumulative deficit for the twelve months to the end of May was NIS 149.2 billion or 10.5% of GDP, down from NIS 158.9 billion, or 11.2% of GDP at the end of April. After swelling because of the coronavirus pandemic, the deficit began to decline in March, when the cumulative twelve-month deficit fell to 12.1% of GDP (NIS 169.4 billion) from 12.4% in the twelve months to the end of February.
The main reason for the narrowing of the deficit was the increase in government revenues, which has amounted to NIS 164.4 billion since the start of the year, up 30% from the corresponding period of 2020.
Government expenditure remains high at NIS 199.2 billion since the start of 2021, up 15.5% over the same period of 2020, and this despite the amount of assistance for the Covid pandemic beginning to fall.
In its most recent forecast, the Ministry of Finance predicted that the fiscal deficit would fall to 8.8% by the end of the year, but this figure is now expected to be lower and the Ministry of Finance is expected to revise its forecast.
Published by Globes, Israel business news - en.globes.co.il - on June 8, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021