Israel's budget deficit rose to 3.3% of GDP on an annualized basis in January, after government expenditure climbed to an all-time record. Independent sources told "Globes" that the reason for the jump in expenditure was that the Ministry of Finance delayed 2018 expenditures to 2019 in order to reduce last year's deficit to the 2.95% target.
Since the announcement that the 2018 budget deficit was 2.95%, exactly on target, Minister of Finance Moshe Kahlon has been using the 'achievement' to promote his political campaign. Meanwhile, sources inform "Globes" that State Comptroller Josef Shapira will investigate whether the 2018 budget deficit figures were manipulated.
The Ministry of Finance insists that the reason for the jump in government expenditure in January was not the postponement of December expenditure. On the contrary, those sources claim, in past years when the deficit was lower than the target, January expenses were brought forward to December to push the deficit up closer to the target. Thus January's expenses were normal because there had been no need to shift expenses to December.
The Ministry of Finance predicts a budget deficit of 3.6% by the end of 2019, well over the target of 2.9%.
Published by Globes, Israel business news - en.globes.co.il - on February 11, 2019
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