Israel's fiscal deficit remains stubbornly high

Moshe Kahlon  photo: Alex Kolomoisky, Yediot Ahronot

Despite efforts by the Treasury to trim spending, the adjusted twelve-month deficit figure remains at 3.8% of GDP.

Israel's fiscal deficit was unchanged in September, according to revised budget performance figures released by the Ministry of Finance yesterday evening. Although the official deficit figure fell to 3.3% of GDP, the actual deficit remains at 3.8% for the third successive month. The figure is disappointing, as the Ministry of Finance has been trying to trim excess government spending as much as possible in the past few months.

<p>According to the September budget performance figures released yesterday, the cumulative deficit for the twelve months October 2018 to September 2019 amounted to 3.3% of GDP. The Ministry of Finance acknowledges, however, that this figure is skewed because it includes October 2018, to which tax receipts totaling NIS 6 billion belonging to September 2018 were transferred. Excluding the deferral of these tax receipts, the cumulative deficit is 3.8% of GDP. The cumulative deficit was at a similar level in July and August.

<p>Last year, because the Jewish holiday season fell in September, the Ministry of Finance postponed tax payment dates to October, and as a result the deficit jumped from NIS 2.3 billion to NIS 8.4 billion in September. The NIS 6.1 billion difference is the reason that the current deficit figure is lower by 0.5% of GDP than the true figure.

<p>The deficit for the first nine months of 2019 is NIS 30.9 billion, which compares with NIS 17.7 billion for the corresponding period last year (excluding the tax deferral).

<p>Civilian government spending grew by 9.7% in the first nine months of this year, in comparison with the first nine months of 2018. The planned spending growth was 6%. Defense spending actually fell by 0.4%. It was planned to grow by 1.8%. Direct tax receipts grew by 3% in the first nine months of this year, while indirect tax receipts remained almost unchanged.

<p><i>Published by Globes, Israel business news - <a href=http://en.globes.co.il>en.globes.co.il</a> - on October 7, 2019</i>

<p><i>© Copyright of Globes Publisher Itonut (1983) Ltd. 2019</i>.

Moshe Kahlon  photo: Alex Kolomoisky, Yediot Ahronot
Moshe Kahlon photo: Alex Kolomoisky, Yediot Ahronot
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018