From the Liveblog of
Monday, September 9, 2024
Israel’s fiscal deficit balloons to 8.3% in August amid war spending
Sharon Wrobel is a tech reporter for The Times of Israel.
Israel’s fiscal deficit grows to 8.3 percent of gross domestic product (GDP), or NIS 12.1 billion ($3.2 billion) in August over the prior 12 months, as the government continues to pour billions of shekels into financing the months-long war with Hamas and the heated conflict with Hezbollah, according to preliminary figures released by the Finance Ministry.
It marks the fifth month that the deficit is above the annual government target of 6.6% of national output set for the end of 2024. Israel posted a budget deficit of 4.2% in 2023.
The deficit widened from 8.1% of GDP in July, 7.6% in June, and 7.2% in May, amid growing military and civilian spending on the ongoing war with Hamas since October 7.
In August, government expenditure amounted to NIS 49.5 billion, taking spending since the start of the year to about NIS 399 billion, an accumulative increase of 32% compared with the same period in 2023. War costs since the outbreak of the fighting in October ballooned to NIS 96.9 billion.
The Finance Ministry reiterates that it expects the deficit to continue to increase until the third quarter, which ends in September, before moving to a downward trend.
The August figures show that state revenues amounted to NIS 37.4 billion. Total revenue from the beginning of the year amounted to about NIS 315.2 billion compared to NIS 303.2 billion in the corresponding period last year, marking an increase of about 4%.
Tax revenue rose by 8.1% in August and is up 1.9% since the start of the year, according to figures by the Israel Tax Authority.
