Fiscal deficit climbs to 7.2% GDP in May, swelling above 2024 target

Israel’s fiscal deficit climbs to 7.2% of gross domestic product (GDP), or NIS 10 billion ($2.66 billion), in May over the prior 12 months, as the government continues to pour billions of shekels into funding the ongoing war with the Hamas terror group, according to preliminary figures released by the Finance Ministry.

It marks the second month that the deficit swelled above the government target of 6.6% of national output set for 2024. Israel posted a budget deficit of 4.2% in 2023.

The May deficit widened from 7% of GDP in April, 6.2% in March, and 5.6% in February, amid increased military and civilian spending.

In May, government expenditure amounted to NIS 54 billion, taking spending since the start of the year to NIS 249.3 billion, an increase of 35% compared with the same period in 2023. War costs since the outbreak of the fighting with Hamas on October 7 ballooned to NIS 69.7 billion.