Israel's September Deficit Below Target, But Ministry of Finance Cautious
Translated & summarized from Globes by baba
Israel's 12-month cumulative deficit stood at 3.2% of GDP in September, below the 4.9% target. State revenues increased 10% year-over-year in September, while expenditures rose less significantly. The Ministry of Finance remains cautious due to higher spending in the latter half of the year, with defense spending up nearly 10% year-to-date.
The story in 6 lines · by baba
- Israel's 12-month deficit was 3.2% of GDP in September, below the 4.9% target.
- September state revenues rose 10% year-over-year to 47 billion shekels.
- Government expenditures in September totaled 57 billion shekels.
- Defense spending increased by nearly 10% year-to-date.
- Civilian ministry spending saw a marginal 0.3% increase.
- State tax revenues grew 6% in September.
Israel's cumulative government deficit over the past 12 months remained unchanged in September at 3.2% of GDP, significantly below the state budget's target of 4.9%. In monetary terms, this amounts to a deficit of approximately 71.8 billion shekels. In September alone, state revenues reached about 47 billion shekels, a 10% increase compared to September of the previous year, while government expenditures for the month were around 57 billion shekels.
Despite the positive figures, the Ministry of Finance cautions against premature celebration, noting that the second half of the year typically sees higher growth in expenditures than the first. Since the start of the year, government spending from the compensation fund has reached 10 billion shekels.
The defense establishment has been the dominant factor in increased government spending, with expenditures up nearly 10% year-to-date compared to last year. In contrast, civilian ministries saw only a marginal 0.3% increase. Within civilian ministries, economic departments reduced spending by 4.7%, social departments by 0.3%, and administrative departments increased spending by 4.7% compared to the same period last year.
State tax revenues in September saw a real increase of 6% compared to the previous year, with some tax payments deferred to early October due to holidays. Direct tax collection rose by 6%, indirect taxes by 3%, and fees by 27%. The growth in direct tax revenue was driven by an increase in corporate tax income.
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