Deficit climbs to 4.2%

Ministry of Finance officials fear that the budget deficit for 2012 could reach 4.5% of GDP, well above the government target of 3.3%.

The government ended November with a budget deficit of NIS 3 billion, and since the start of 2012 the deficit has totaled NIS 26 billion, up 68% from the corresponding months of 2011, the Ministry of Finance reported today. Over the past 12 months the deficit has risen to NIS 39 billion, or 4.2% of GDP, well over the government target of 3.3%, revised upwards from 2%.

Most of the rise in government expenditure stems from defense spending which has risen by NIS 2.2 billion since the start of the year and amounted to NIS 800 million in November alone. The defense establishment is expected to demand an extra NIS 3 billion due to the Gaza operation.

The figures are worrying for Minister of Finance Yuval Steinitz all the more because December typically has a deficit three times that of regular months due to seasonal factors. In a best case scenario, Ministry of Finance officials expect the deficit to be between 4%-4.2% but in all likelihood it could reach 4.5%.

Tax revenues from real estate rose 10% in November to NIS 491 million in November 2012 compared with NIS 440 million in November 2011. Since the start of 2012 tax revenues from real estate have totaled NIS 5.37 billion, up 22% from the corresponding months of 2011.

Total tax revenues fell 2.2% to NIS 17.38 billion in November. Direct taxes rose 9.2% to NIS 8.6 billion but indirect taxes fell 11.7% to NIS 8.34 billion.

Revenues from fuel tax rose 1.5% in November to NIS 1.4 billion. Since the start of 2012 revenues from fuel tax have risen 1.3% from November 2011 to NIS 14.45 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on December 5, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018