Israel's Budget Deficit Holds Steady at 3.2% as State Revenues Surge
Translated & summarized from Calcalist by baba
Israel's government budget deficit remained stable at 3.2% of GDP in September, as state revenues surged by 10.4% to 457.1 billion shekels year-to-date. Government expenditures rose by a more moderate 3.4% to 486.6 billion shekels. The cumulative deficit is significantly lower than last year, largely due to increased revenue. Spending may rise in the final months of the year amid defense budget discussions.
The story in 6 lines · by baba
- Israel's budget deficit held steady at 3.2% of GDP in September.
- State revenues increased by 10.4% to 457.1 billion shekels year-to-date.
- Government expenditures rose by 3.4% to 486.6 billion shekels year-to-date.
- The cumulative deficit is 29.5 billion shekels, down from 56.4 billion last year.
- The annual deficit remains below the 4.9% of GDP target for 2026.
- Increased government spending is possible in the final months of the year.
Israel's government budget deficit remained unchanged in September at 3.2% of the GDP over the past 12 months, according to data released by the Ministry of Finance. The monthly deficit was approximately 10.1 billion shekels, an increase from about 9.5 billion shekels in September of the previous year. Despite this monthly rise, the annual deficit is significantly below the 4.9% of GDP ceiling set for the 2026 state budget.
State revenues in September reached about 47 billion shekels. Since the beginning of the year, revenues have totaled 457.1 billion shekels, a 10.4% increase compared to 414.1 billion shekels in the same period last year, reflecting an additional 43 billion shekels in income.
Conversely, government expenditures in September amounted to approximately 57.1 billion shekels. For the year to date, expenditures reached 486.6 billion shekels, a modest 3.4% increase from 470.5 billion shekels in the first nine months of 2025, totaling about 16.1 billion shekels more.
The cumulative deficit since the start of 2026 stands at roughly 29.5 billion shekels, compared to about 56.4 billion shekels in the corresponding period last year. This reduction is primarily attributed to the sharp rise in state revenues outpacing the increase in government spending.
The data indicates continued stability in the deficit, following a decrease from 3.3% to 3.2% of GDP in August. However, government spending could accelerate in the final months of the year, a period that traditionally sees a significant portion of budget execution. This comes amid discussions about increasing the defense budget, with the security establishment seeking additional funds while the Treasury's budget division believes some needs can be met within the existing budget. The ongoing growth in state revenues may help the government meet its annual deficit target, but this also depends on the level of spending in the remaining months of the year.
