Budget deficit in relation to GDP was only 1.4% - In March the budget surplus was NIS 700 million

The deficit figures published by the Accountant General of the Ministry of Finance, Yahli Rotenberg, reveal that the budget deficit in relation to GDP in Israel is only 1.4% - the lowest since 2008, when Prime Minister Ehud Olmert was still and Finance Minister Roni Brown was.
In March, a total budget surplus of NIS 700 million was measured, making March the third month in a row that a budget surplus was measured - a situation that has not been remembered for years. The total budget surplus in the budget already reaches NIS 23.4 billion in the first quarter of the year.
The huge decline in the deficit - which reached a peak of 11.5% of GDP in the days of the Corona crisis - is due to a huge continuous increase in state tax revenues, due to the economy showing high growth and particularly rapid exit from the Corona crisis. Raised Israel's ranking forecast positive.
The large budget surplus causes many government ministries to now demand additions to their budgets, however according to the law it is not possible to increase expenses when tax collection increases. What can be done in such cases is to reduce various taxes, such as value added tax or income tax rates. Therefore, the same "surpluses" can also not be used to prevent the lateral cuts required to absorb the 25,000 immigrants from the war in Europe.
State revenues in the first quarter amounted to NIS 125.6 billion, an unprecedented increase in recent years of 29.3% compared with the corresponding period last year, with the increase from tax revenues alone amounting to 30.3%. This, without there being an increase in tax rates. In the distant past there were substantial increases of tens of per cent in tax collection only when these were due to tax increases initiated by governments.
Government spending is also declining compared to the days of the Corona crisis, mainly due to the significant decline in aid to businesses and grants and the payment of unemployment and unemployment benefits to workers. Total spending in the first quarter of 2022 reached NIS 102.2 billion, a decrease of 15.2% A year ago, neutralizing the aid program for Corona, however, a minimal increase in government spending of 0.2% was measured, mainly due to the approval of a state budget that allows the government to increase its spending this year.
The decrease in the deficit is directly related to the fact that in the corresponding quarter in 2021 the government spent NIS 20.8 billion on economic assistance to victims of the Corona crisis, while in the first quarter of 2022 the assistance amounted to only NIS 2.4 billion. In total, the cumulative implementation of the economic assistance program has already reached NIS 177.7 billion.
The large budget surplus causes many government ministries to now demand additions to their budgets, however according to the law it is not possible to increase expenses when tax collection increases. What can be done in such cases is to reduce various taxes, such as value added tax or income tax rates.