Budget deficit jumps to 7% of GDP in April, above 2024 target

Israel’s fiscal deficit swelled to 7% of gross domestic product (GDP), or NIS 11.7 billion ($3.1 billion), in April over the prior 12 months, as the government pours billions of shekels into funding the ongoing war with the Hamas terror group, according to preliminary figures released by the Finance Ministry.

Israel, which posted a budget deficit of 4.2% in 2023, has set a deficit target of 6.6% of national output for 2024.

The April deficit widened from 6.2% of GDP in March, 5.6% in February, and 4.8% in January amid increased military and civilian spending and a decline in tax revenues.

Due to the Passover holiday, tax payments of an estimated NIS 4.8 billion were delayed from April to May, the ministry says. After taking into account the delayed tax payments, the April deficit rose to an estimated 6.7%, or NIS 6.9 billion of GDP.

In April, government expenditure amounted to NIS 48.2 billion, taking spending since the start of the year to NIS 195.3 billion, an increase of 36% compared with the same period in 2023. Military costs since the outbreak of the fighting with Hamas have ballooned to NIS 59.6 billion.