The budget deficit remains unchanged in August: 3.8% of GDP

The budget deficit remains unchanged in August, according to the updated state budget data published by the Treasury. The data analysis shows that the Treasury is able to reduce the growth of government ministries, thanks to the transition government - but on the other hand, the worrying weakness in state revenues continues to be tax-depleted compared to August 2018. The halt in growth comes after a long period of average annual growth of about 5% in revenue. .
 The cumulative deficit over the past 12 months is 3.8% of GDP, similar to its July level. Since the beginning of the year, a deficit of NIS 28.7 billion was measured in the state budget, compared with a deficit of NIS 15.4 billion in the corresponding period.
Budget Commissioner Shaul Meridor said the Treasury hopes the year will end with a 3.6% deficit in line with the updated forecast that the Treasury released in January. This means that the deficit will reach NIS 12.5 billion from the deficit target set in the 2019 budget approved by the Knesset, which is 2.9% of GDP. Meridor estimates that reducing the deficit by the end of the year by about two tenths of a percentage point will be achieved thanks to a reduction in spending, thanks in part to the re-election to the Knesset that allows the Treasury to prevent government ministries from using budget surpluses from 2018.
Accordingly, there is also a decrease in government spending growth in August: From the beginning of the year to the end of August, the government ministries spent 7.7% greater than the amount they spent in the same period last year, when the plan was to spend 5.1%. On the other hand, the weakness in tax revenues continues - which amounted to NIS 24 billion in August compared to NIS 23.9 billion in August 2018. The tax authority explains some of the weakness in the introduction of vehicle imports in March, a move that detracts from the NIS 300 million tax revenue in August.