Israel's government debt rose 20% in 2020 to nearly NIS 1 trillion, as the country raised capital for assistance programs related to the Covid-19 crisis, according to the Ministry of Finance Account General. The debt is comprised of NIS 551 billion in domestic tradable bonds, NIS 272 billion in domestic non-tradeable bonds, and NIS 161 billion in foreign currency bonds.
Israel government fiscal policy during the Covid-19 pandemic was to raise debt in order to pay for unemployment including people on unpaid leave, grants to the self-employed and small businesses, small handouts to all Israel's citizens, and postponements in tax payments. As a result, the public debt to GDP ratio rose by 12.4% last year to 72.4% at the end of 2020.
Israel raised a record NIS 265 billion debt last year, more than double the usual annual amount. This is included NIS 165 billion in tradeable domestic bonds, NIS 26 billion in non-tradeable bonds and NIS 74 billion in foreign currency debt.
This level of debt sets Israel back ten years, after over the last decade the debt to GDP ratio has consistently fallen. The last time that the debt to GDP ratio was above 70% was in 2010, when it was 70.9%. By 2019 it had fallen to 58.5%.
Published by Globes, Israel business news - en.globes.co.il - on April 20, 2021
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