For the first time since 1987 the government ended a calendar year with a budget surplus

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by Ifi Reporter Category:Capital Market Jan 11, 2023

For the first time since 1987, the government ended a calendar year with a budget surplus, not a deficit. 2022 ended with a surplus of 0.6% of GDP, following the sharp increase in tax revenues - compared to a deficit of 4.4% the previous year.
According to an estimate by the Accountant General of the Ministry of Finance published today (Wed), the government's revenues in 2022 exceeded its expenses by NIS 9.8 billion, and this after in December alone, for seasonal reasons, spending increased, and a deficit of NIS 18.7 billion was recorded.
The budget surplus is measured as a proportion of the GDP estimate for 2022, which also grew more than the forecasts. The Ministry of Finance estimates that the nominal annual GDP amounted to slightly more than NIS 1.75 trillion.
In the state budget for 2022, a deficit of 3.9% of GDP was planned, not including another NIS 10 billion for aid programs to deal with the consequences of the Corona crisis.
For the first time since 1987, the government ended a calendar year with a budget surplus, not a deficit. 2022 ended with a surplus of 0.6% of GDP, following the sharp increase in tax revenues - compared to a deficit of 4.4% the previous year.
According to an estimate by the Accountant General of the Ministry of Finance published today (Wed), the government's revenues in 2022 exceeded its expenses by NIS 9.8 billion, and this after in December alone, for seasonal reasons, spending increased, and a deficit of NIS 18.7 billion was recorded.
The budget surplus is measured as a proportion of the GDP estimate for 2022, which also grew more than the forecasts. The Ministry of Finance estimates that the nominal annual GDP amounted to slightly more than NIS 1.75 trillion.
In the state budget for 2022, a deficit of 3.9% of GDP was planned, not including another NIS 10 billion for aid programs to deal with the consequences of the Corona crisis.
Due to the fact that the government is currently operating on the basis of a continuous budget that restrains spending, no sharp change in the budget deficit or surplus is expected in the coming months. However, if the coalition agreements are indeed realized and government spending increases sharply, the deficit will soar. According to the estimates of the Bank of Israel, the deficit in 2022 will reach 1.8% of GDP.
In total, the state's revenues reached NIS 468 billion in 2022 - that is, more than NIS 70 billion more than the forecast in the original budget, which was approved at the end of 2021. However, over the course of the year, the forecasts were updated, and in August the Treasury estimated that revenues would reach NIS 456 billion .
The budget surplus in 2022 represents the gap between revenues and expenditures in the past year. However, the government has a stock of debt that at the beginning of 2022 reached the level of more than one trillion shekels. During the year, the net domestic debt decreased by NIS 42.4 billion, due to a high volume of redemptions, while the net foreign debt decreased by NIS 4.9 billion. The decrease in debt, along with the sharp increase in GDP, is expected to bring the ratio of government debt to GDP, which soared during the Corona crisis, back to about 60%.

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