Israel's 12-Month Budget Deficit Reaches 3.3% of GDP

Israel's state budget deficit over the 12 months ending in October 2026 reached 3.3% of GDP, amounting to 74 billion shekels. This figure represents a 0.1% increase over the previous month. In October alone, the deficit was approximately 18.3 billion shekels, compared to 15.2 billion shekels in October of the prior year. State revenues for October were around 46.2 billion shekels, while expenditures totaled approximately 64.5 billion shekels. From January to October, state revenues increased by about 10% year-on-year, reaching approximately 503.3 billion shekels, up from 457.6 billion shekels in the same period last year. Expenditures rose by 4.2%, from 529.1 billion to 551.1 billion shekels. Defense spending saw the most significant increase, up 9.9% from the previous year, far exceeding the budgeted 2.7% growth. Conversely, spending by economic ministries decreased by 2.8%, despite a planned 12% increase. Tax revenues in October were 44 billion shekels, including payments deferred from September due to holidays. A notable change from the previous year involves the compensation fund, which received 25% of real estate purchase tax revenues this year, compared to 100% in 2025. Overall, tax revenues from January to October grew by 8% in real terms compared to the same period in 2025, with direct tax revenues up 11%, indirect taxes up 4%, and levies up 10%.