Israel Records Zero 12-Month Deficit For First Time Since 2008

Israel‘s cumulative fiscal deficit for the year ended May was zero. For the first time since 2008, the government has recorded no deficit during the past twelve months. According to preliminary estimates released by the Central Bureau of Statistics, there was a surplus of NIS 1.4 billion in May. To date, there has been a surplus of NIS 33.3 billion for 2022. For the same period in 2021, the deficit was NIS 34.8 billion, reports Globes. 

Israeli economic growth slowed in the first quarter, declining an annualized 1.6% from the prior three months, but joblessness has fallen to near 3%.

During the first five months of 2022, the state‘s revenues reached NIS 206.3 billion, an increase of 25.4% over 2021. Compared with the previous five-month period, government spending was NIS 173 billion, a 13.2% decrease.

Tax revenue has risen as a result. Revenue grew to 206.3 billion shekels in the first five months of the year from 164.5 billion in the first five months of 2021. Likewise, under Finance Minister Avigdor Lieberman, who took over last year, government spending plummeted from 199.3 billion to 173 billion.

In May, taxes on real estate almost doubled. These taxes generated 2.7 billion NIS in net receipts last month, compared to 1.4 billion NIS in May of last year. Capital gains taxes were collected 81% higher, while purchase taxes were collected 79% higher.

“Fiscal data continues to be very positive,” said Jonathan Katz, chief economist at Leader Capital Markets. “This is positive news for the bond market.”

It is expected that the state budget for 2023 will be released this month and presented to the cabinet for a vote around June 23.