Israel’s fiscal deficit has risen again for the 18th consecutive month, after reaching zero in March 2023. The deficit in the 12 months to the end of September this year reached 8.5% of GDP, or NIS 165.8 billion, the accountant said. General of the Ministry of Finance, Yali Rotenberg. I reported today.
The figure at the end of August was 8.3% of GDP, or NIS 161 billion. Consequently, the deficit continues to move away from the target set by the government in the amended 2024 budget approved last March, which is 6.6%.
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The Ministry of Finance estimates that the deficit peaked in September and will decline somewhat after that. This is because the huge rise in government spending in October last year when the war broke out will be dropped from the 12-month figures. Finance Minister Bezalel Smotrich estimated last month that his ministry would succeed in reducing the deficit within the target of 6.6% of GDP by the end of 2024. He even bet a bottle of whiskey on the matter.
It looks like Smotrich will lose his bet. Defense spending rose above the amount scheduled for 2024 due to the delay in receiving the US aid package and the start of the ground invasion in Lebanon. The Bank of Israel’s research department expects a fiscal deficit of 7.2% at the end of 2024.
In September 2024 itself, the fiscal deficit reached NIS 8.8 billion, more than double the fiscal deficit of NIS 4 billion in September 2023. Since the beginning of 2024, the fiscal deficit has reached NIS 92.8 billion compared to just NIS 4 billion in September 2024. Nine months of Year 2023.
Most of the larger deficit stems from higher defense spending and other war-related expenses. The war has cost an estimated NIS 78.3 billion since the beginning of 2024 and NIS 103.4 billion since the war began in October 2023. Even without war-related spending, government spending rose by 7.7% this year compared to the corresponding period in 2023. Although This number decreases from month to month.
State revenues have increased by 5.4% since the beginning of 2024, an encouraging and continuing increase.
Published by Globes, Israel Business News – en.globes.co.il – on October 10, 2024.
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