Israel's Budget Deficit Holds Steady at 3.2% of GDP
Translated & summarized from Davar by baba
Israel's cumulative budget deficit remained at 3.2% of GDP in September, below the 4.9% annual target. State revenues increased by 10.4% year-to-date to 457.1 billion shekels, while expenditures rose by 3.4%. The September deficit was 10.1 billion shekels. Despite increased defense spending, strong tax revenues, particularly from securities, are bolstering state finances.
The story in 6 lines · by baba
- Israel's 12-month budget deficit held at 3.2% of GDP in September, below the 4.9% target.
- State revenues rose 10.4% year-to-date to 457.1 billion shekels, with tax revenues up 13.3%.
- Securities taxation saw a significant 53% increase in revenue.
- September's deficit was 10.1 billion shekels, compared to 9.5 billion shekels last year.
- Defense spending was approximately 12 billion shekels, with a 15 billion shekel transfer approved.
- Economic ministries' expenditures were 4.7% lower than the previous year despite budget increases.
Israel's cumulative budget deficit over the past 12 months remained unchanged in September at 3.2% of the Gross Domestic Product (GDP), well below the annual target of 4.9%. These figures were released by the Accountant General's Department at the Ministry of Finance.
State revenues surged by 10.4% since the beginning of 2026, reaching 457.1 billion shekels, compared to 414.1 billion in the same period last year. Expenditures increased by 3.4% during the same timeframe. The deficit for September alone was 10.1 billion shekels, a slight rise from 9.5 billion shekels in September of the previous year. Year-to-date, the deficit totals 29.5 billion shekels, approximately 1.35% of GDP and a quarter of the allowed deficit for 2026, which is 111 billion shekels or 4.9% of GDP.
State expenditures from the start of 2026 amounted to 486.6 billion shekels out of a total budget of 698.2 billion shekels, representing about 69.7% of the budget with three-quarters of the year elapsed. Civilian ministries showed a larger gap, spending 288.6 billion shekels out of a 431 billion shekel budget, or 67% of their allocation. Economic ministries, however, exhibited the most extreme disparity, with their budgets increasing by 12.1% year-over-year, yet their expenditures from the start of 2026 were 4.7% lower than the corresponding period last year. The Ministry of Defense spent approximately 12 billion shekels, following a transfer of about 15 billion shekels approved last month for the defense system, much of which came from a reserve fund held by the Ministry of Finance for potential defense budget overruns.
Conversely, state revenues continue to be strong in 2026. September saw 47 billion shekels in state revenue, and year-to-date revenues have reached 457 billion shekels, a 10.4% increase compared to the same period in 2025, driven by a 13.3% rise in tax revenues. The Tax Authority reported the highest jump, 53%, in securities taxation.
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