The state deficit rises to 7.6%, but state revenues continue to grow

Photo Credit: Bank of Israel, Wikipedia Commons
The deficit in the state budget continues to rise and in June reached a rate of 7.6% in the last 12 months. This is a significantly higher rate than the target of 6.6% set in the budget law for 2024. The increase in the deficit in June alone was 0.4%.

The highest deficit in two decades is occurring at the same time as additional war-related spending, payments to evacuees, and compensation for businesses.

According to the data of the Accountant General at the Treasury, CPA Yali Rotenberg, “the deficit climbed in June by another NIS 14.7 billion compared to last June, which ended with a deficit of only NIS 6.4 billion.” The accumulated deficit in the past year reached NIS 146 billion, a record amount in recent decades. The Treasury expects a continued increase in the deficit until the end of the third quarter of the year but estimates that after that a downward trend will begin.

Despite the situation, state revenues continue to grow. In June, revenues of NIS 36.5 billion were recorded, an increase of 11.7% compared to last year. Since the beginning of the year, state revenues have reached NIS 238 billion, compared to NIS 230.4 billion in the corresponding period in 2023. The Treasury notes that “these revenues continue to be high compared to the forecast in the budget and reflect a consistent growth trend compared to the corresponding period last year.”

On the other hand, expenses increased significantly. In June, expenses of NIS 51.2 billion were recorded, an increase of 30.9% compared to June last year. Since the beginning of the year, government expenditures have reached a record amount of NIS 300.3 billion, compared to NIS 223.7 billion in the corresponding period of 2023. The cumulative increase in expenditures reaches 34.2% compared to last year.

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