The budget deficit of the Israeli government in the last 12 months (from November 2017 to October 2018) It increased to 3.6% of GDP, announced yesterday by the Ministry of Finance. The deficit of NIS 38.5 billion, 2.9% of GDP, is scheduled for 2018, but the real deficit is NIS 9 billion higher.
The last 12 months are December 2017, when tax revenues were extremely low. Revenues from state taxes in October amounted to NIS 28.1 billion.
Sources of the Ministry of Finance attributed the increase in the deficit due to technical reasons, but the decline in tax revenues still occurs. Sources reported that the increase in the deficit is due to NIS 4 billion one-off reserves for the property tax in December 2017. He added that the deficit will fall next month. Nevertheless, the Ministry of Finance refused to express budget deficit at the end of this year in two months. The target budget deficit for 2018 is 2.9% of GDP.
The state budget deficit in October amounted to 800 million NIS. The Finance Ministry explained that the estimated NIS 6.1 billion in tax payments was postponed from September to October due to Jewish holidays in September. Apart from this postponement, the deficit in October amounted to NIS 6.9 billion. Tax revenues amounted to 256 billion NIS in January-October 2018, 2.9% less in nominal terms than in the corresponding period of the previous year.
The unsatisfactory news was published when the farewell party of the outgoing governor of the Bank of Israel, Karnit Flug, was held.
Government expenditures in October amounted to NIS 33 billion: NIS 26.6 billion expenditures by government ministries, NIS 2.16 billion in interest payments on public debt, and NIS 3.6 billion in repayment of capital and interest to the National Insurance Institute.
Government expenditure amounted to NRS 306.4 billion in the period from January to October 2018. 81.1% of the original budget and 7.2% more than in the corresponding period of the previous year. Defense expenditures increased by 3.5%. However, it should be noted that from 2018, revenues from the Israeli Land Authority designated for projects in the Ministry of Defense, listed in free trade agreements, are taken into account when calculating the budget deficit.
Published by Globes, Israel business news – en.globes.co.il – November 6, 2018
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