Israel's fiscal deficit continued to widen in July, reaching 8.1% of GDP over the past 12 months, or NIS 155.2 billion, the Ministry of Finance accountant general Yali Rothenberg reports, up from 7.2% of GDP at the end of May. The fiscal deficit has grown in each of the past 16 consecutive months.
The fiscal deficit had been 7.6% of GDP at the end of June and it is now 1.5% higher than the fiscal deficit target of 6.6% set by the government for the end of 2024 in the 2024 budget.
In July itself, the fiscal deficit stood at NIS 8.5 billion compared with NIS 600 million in July 2023. Since the start of 2024, the fiscal deficit has totaled NIS 72 billion compared with a surplus of NIS 6 billion in the first seven months of 2023.
Government spending since the beginning of the year has amounted to more than NIS 352 billion, up 32.8% compared with the corresponding period last year. The main increase in the deficit has been due to high spending on defense and by civilian ministries due to the war. However, even excluding war expenses, the increase in government spending is about 8.7%.
This, in contrast to an increase of only about 3.1% in the state's revenues, which since the beginning of the year have amounted to about NIS 278 billion, compared with 269 billion in the first seven months of 2023.
The Ministry of Finance estimates that the deficit will climb to a peak by September, after which there will be a decline. The Ministry of Finance budget department believes that the deficit will converge downwards to the target of 6.6%, on the basis of which the state budget was approved last March.
Published by Globes, Israel business news - en.globes.co.il - on August 8, 2024.
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