Israel's Fiscal Deficit Rises for 17th Straight Month

Israel’s fiscal deficit has risen for the 17th consecutive month, reaching 8.3% of GDP, or NIS 161 billion, according to a report released by Finance Ministry Accountant General Yali Rothenberg on Tuesday. The figure marks an increase from the previous month's deficit of 8.1%, or NIS 155 billion, and is significantly higher than the government's revised target of 6.6% set in the 2024 budget approved in March.

The ongoing rise in the deficit has become a concern as Israel drifts further from its fiscal goals. The Finance Ministry expects the deficit to continue climbing in the short term but forecasts a decrease starting next month. The high government spending that began in October 2023, when the war broke out, will drop out of the rolling twelve-month calculations.

Despite the current fiscal challenges, Finance Minister Bezalel Smotrich expressed confidence that the government would succeed in reducing the deficit to meet the 6.6% GDP target by the end of 2024.

Israel’s fiscal situation remains under close scrutiny, as the government grapples with balancing post-war recovery spending and long-term financial stability.

Share this article or subscribe to our newsletter for more updates on Israel’s economic outlook.