Israel's Budget Deficit Drops to 3.2% of GDP in August

Israel's cumulative budget deficit over the past 12 months decreased by 0.1% to 3.2% of the Gross Domestic Product (GDP) in August, down from 3.3% in July. This data comes from the Ministry of Finance's report on budget execution and state revenue.

The monthly deficit in August was approximately 7.9 billion shekels, compared to a deficit of about 9.6 billion shekels in the same month last year. This reduction follows a period in July where the cumulative deficit remained unchanged at 3.3% of GDP, a level not seen in two and a half years.

Since the beginning of 2026, the state has experienced a sharp increase in revenue, while expenditure growth has been more moderate. State revenues from January to July totaled 362.1 billion shekels, an 11.8% rise compared to the same period in 2025. In August alone, revenues reached approximately 47.9 billion shekels, bringing the total from the start of the year to about 410.1 billion shekels, an increase of 11.5% year-on-year.

Government expenditures in August amounted to roughly 55.7 billion shekels. Year-to-date, expenditures reached approximately 429.3 billion shekels, a 3.6% increase from the comparable period last year, when spending was around 414.5 billion shekels.

The current deficit is significantly below the 4.9% of GDP deficit ceiling set in the 2026 budget, which was approved by the Knesset in late March.