Recovery in Israel economic activity: The deficit in the last 12 months decreased to10.1%

The recovery in economic activity in Israel continues, according to two indices published today. The first is the Accountant General's announcement that the cumulative deficit in the last 12 months reached the end of June reached 10.1% in relation to GDP, which is NIS 144.6 billion, compared with 10.5% at the end of May.
The second figure comes from another division of the Ministry of Finance, the Tax Authority, which reports an increase in imports to Israel, an increase that indicates an increase in private consumption.
The Accountant General's announcement in the Treasury also shows that the percentage of implementation of the economic assistance program at the end of June (the end date of the economic safety net) was 76.8% - the total implementation in cash and liabilities for the years 2020-2021 was NIS 155.5 billion.
The declining trend in the deficit is mainly due to the increasing trend in state revenues, which amounted to NIS 194 billion since the beginning of the year. These revenues reflect an increase of 28.8% compared to the same period last year. The volume of expenses remained high at NIS 237.1 billion. This volume reflects an increase of 13.1% compared to the corresponding period last year and is mainly due to the economic assistance program.
In January-June 2021, revenues amounted to NIS 181.9 billion, compared with NIS 148.1 billion in the corresponding period last year.
At uniform tax rates, tax revenues rose by 22%. Direct tax revenues increased by 25% and indirect tax revenues increased by 20% and fee income increased by 1%. Compared to January-June 2019, the growth rates are more moderate, with 22% in direct tax revenues and 10% in indirect tax revenues.
In light of the fact that the 2020 data reflect a crisis year, in addition to the income analysis compared to the corresponding period in the previous year, an analysis is presented compared to the 2019 data. Even in comparison with this figure, there is an impressive increase in the volume of tax revenues.
The Tax Authority also published today the import report in June, which completes - from another angle - the picture of the economic recovery in post-Corona Israel.

Vehicles - In June 2021, imports were recorded in the amount of 27,443 vehicles (private) compared to 16,439 in June 2020, an increase of 66.9%. Commercial vehicle imports amounted to 1,303 vehicles compared to 406 in June 2020, an increase of 220.9%. The sharp increase in vehicle imports is due on the one hand to increased imports in June 2021 higher than the average in a normal month and on the other hand to lower imports of vehicles in June 2020 following the evacuation of warehouses in ports in March 2020 for receiving essential goods in an emergency.

In January-June 2021, imports of passenger vehicles amounted to 128,671 compared to 85,075 in the corresponding period last year, an increase of 51.2%. Imports of commercial vehicles increased by an even more significant percentage by 90.5% and reached a volume of 6,205. The high increase in commercial vehicle imports is partly explained by an increase in demand for commuter vehicles.
The trend data indicate an increase in imports of passenger vehicles starting in July 2020.
Electrical and electronic products: In June 2021, compared to June 2020, there was an increase in imports of white appliances. Refrigerators, washing machines, dryers and dishwashers increased by 54.4%, 7.6%, 63.4% and 47.9% respectively.
Cumulatively in January-June 2020, imports of refrigerators and dishwashers increased by 39.0% and 13.2%, respectively. Imports of washing machines, on the other hand, decreased by 10.0% and imports of tumble dryers remained unchanged compared to January-June 2020.
Imports of televisions decreased by 7.7% in June 2021 compared to June 2020. Cumulatively, since the beginning of the year, imports of televisions have increased by 4.4%.
Cigarettes and tobacco products - In June 2021, there was a moderate increase in the import of cigarettes by 1.6% compared to June 2020. Revenues from the purchase tax on the import of cigarettes increased by a similar rate. The import value of cigarettes increased at a relatively high rate of 12.7%.
The value of other tobacco imports, including smoking tobacco, hookah tobacco, pipe tobacco, cigars and heating units, decreased in June 2021 by 8.5% compared to June 2020. Cumulatively since the beginning of the year, other tobacco imports increased by 31.9% A more moderate 19.1%.
The total value of total imports in June 2021 amounted to about $ 7.3 billion, an increase of 35.6% compared to the value of imports in June 2020. The increase is due, among other things, to high imports of vehicles in June 2021 on the one hand and low imports of vehicles in June 2020 on the other. Trend indicates an increase in the value of imports starting in July 2020.
Fuel Market - Data from May 2021 show that the increase in gasoline and diesel marketing volumes continues at moderate rates than in previous months, an increase of 8.1% and 2.6% respectively compared to May 2020. The increases are due to relatively low fuel consumption in May 2020 due to restrictions.