Israel heading for 2022 fiscal surplus despite November deficit
For the third successive month, Israel reported a fiscal deficit in November after government expenditure was NIS 1.2 billion higher than state revenues, the Ministry of Finance Accountant General department reports. However, since the start of the year, Israel has recorded a fiscal surplus of NIS 28.9 billion. Over the past 12 months the fiscal surplus has shrunk to NIS 7.5 billion, or 0.4% of GDP.
In the first 11 months of 2022, government expenditure rose by 5.6% compared with the corresponding period of 2021, when excluding expenditure related to the Covid pandemic. However plans included in the budget had called for 6% higher government expenditure as of November and government ministries and agencies have not implemented 7% of the programs budgeted for.
Since the start of 2022 government expenditure has totaled NIS 398.9 billion of which NIS 6.5 billion was for assistance programs related to coping with Covid. State revenues since the start of the year amounted to NIS 427.9 billion, beating all forecasts.
Until a year ago Israel was still mired in a fiscal deficit of NIS 48 billion. Moving to a fiscal surplus is still considered a rare feat in national economic terms, despite the erosion in the surplus over the past few months. According to the initial forecast, 2022 was meant to end with a fiscal deficit of nearly NIS 65 billion. In practice, it looks like it will probably end the year with a fiscal surplus.
The explanation for this is in the exceptional increase of the state’s tax revenues this year, which is mainly explained by one-time revenues, and on the other hand, the underperformance of the government ministries. However, next month the data for December will be published, which is characterized as a month with high expenses for the utilization of the budget before the end of the year, and only then will we know the macro data for all of 2022.
Published by Globes, Israel business news – en.globes.co.il – on December 8, 2022.
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