The cumulative fiscal deficit in Israel for the twelve months to the end of October 2021 narrowed to 5.5% of GDP, or NIS 47.1 billion, down from 7.2% at the end of September, the Ministry of Finance Accountant General reports. The fiscal deficit was 10.1% of GDP at the end of October 2020, amounting to NIS 123.8 billion. The fiscal deficit peaked at 11.7% at the end of 2020.
Although the narrowing of the deficit in recent months has been encouraging in the wake of the Covid crisis, Ministry of Finance officials say that the sharp shrinking in the deficit last month was due to an irregular NIS 4.4 billion budget surplus (compared with a NIS 20.4 billion deficit in October 2020) caused by technical reasons, because taxes worth NIS 8.2 billion paid in October were held over from September due to the holidays. Without this, October would have ended with a small deficit of NIS 3.8 billion.
Government expenditure in October amounted to NIS 36.7 billion. Since the beginning of the year, government expenditure has been NIS 383.4 billion, slightly higher than the NIs 382.3 billion, over the same period of 2020.
Minister of Finance Avigdor Liberman said, "After we passed the budget and signed a pay agreement for the economy and by keeping the economy open and working, the deficit continues to fall. Economics is very often about psychology and so we will continue to create certainty and strengthen all the population and businesses in the State of Israel."
Published by Globes, Israel business news - en.globes.co.il - on November 8, 2021.
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