Israel: The fiscal deficit widened to $35.7 billion as of April

Israel – The Israeli Ministry of Finance announced yesterday that the budget’s fiscal deficit amounted to 7 percent of the gross domestic product, or $35.7 billion, during the twelve months ending last April.

This came in a statement issued by the office of the Ministry’s Accountant General, Eli Rotenberg, in which he stated that the deficit grew from 6.2 percent, or $31.6 billion, in the year ending the previous March.

The Accountant General stated that the value of the deficit amounted to 132.2 billion shekels ($35.7 billion), a number not previously recorded during the global financial crisis in 2008, amid a war led by Tel Aviv on the Gaza Strip since October 7.

Thus, the recorded deficit figure exceeds the government’s goal for the whole of 2024, which is 6.6 percent of the Israeli gross domestic product.

Since October 7, Israel, with American support, has been waging a devastating war on Gaza, which has left tens of thousands dead and wounded, most of them children and women, massive destruction, and famine that has claimed the lives of children and the elderly.

The statement added: “In April, the payment of taxes amounting to 4.8 billion shekels was postponed until May, due to the Easter holiday… but even following taking this amount into account, the fiscal deficit would have reached 6.7 percent.”

In April alone, the fiscal deficit reached 11.7 billion shekels ($3.16 billion)… “The growth trend in the deficit will continue in the coming months despite the better-than-expected revenue picture,” according to the statement.

The Ministry of Finance estimates that the annual deficit will peak next September, and then begin to decline to 6.6 percent of GDP by the end of the year.

On the other hand, the Accountant General believes that in light of the current rate of government spending, the picture may be more pessimistic, “and the fiscal deficit at the end of the year may reach 8% of the domestic product.”

Since the beginning of 2024, the fiscal deficit has reached 37.6 billion shekels ($10.2 billion), compared to a budget surplus of 17.5 billion shekels ($4.73 billion) in the corresponding period of 2023.

Anatolia