Israeli Government Reports 12-Month Budget Deficit of $6 Billion

New data released by Israel’s Finance Ministry on Sunday reveals a 12-month budget deficit of 23.1 billion shekels (around $6 billion). The deficit hike is primarily attributed to a 4.3% decline in tax collection in the first eight months of 2023, coupled with a 9.4% spike in government spending.

Gad Lior, a senior analyst for the daily Yedioth Ahronoth, said the downturn in the Israeli economy has led to a fall in value-added tax payments. Lior also noted a sharp drop in real estate transactions, which he linked to the high benchmark interest rate. Additionally, the depreciation of the shekel against the dollar has inflated the government’s costs, including rent payments for Israeli embassies.

In March the budget went from having a surplus to running a deficit, which has been steadily growing ever since.