State Budget Deficit Continues to Grow

YERUSHALAYIM -
A general view of the Finance Ministry. (Flash90)

The state’s budget deficit continued to grow in June, according to preliminary figures from the Finance Ministry. The state spent NIS 6.8 billion more than it had in June, and for the period January-June 2019 the budget was NIS 21.9 billion in the hole. With nothing likely to change the deficit spending before the end of the year, or certainly before the September elections, it’s almost certain the budget deficit for the year will reach NIS 40 billion or more, the ministry said.

The deficit for the first six months of 2018 was just NIS 7.8 billion, figures show. Between June 2018 and June 2019, the deficit amounted to 3.9% of the gross domestic product. Forecasts at the beginning of the year said the deficit would be under 3.6%, and that has already been exceeded. Contributing to the situation was the fact that spending by the government in the second quarter was 7% higher than planned.

An analysis of the figures by Yisrael Hayom shows that defense spending, usually the main suspect in deficit spending, was not to blame this time; spending on defense in the six months prior to June 30 of this year grew just 1.7%. Domestic spending, which includes everything from new highways to salary and pension funding, grew 19% during the period. While spending was up, taxes weren’t, with the government’s take from taxes growing 0% in the first six months of the year. With an election pending, it’s almost a guarantee that no new taxes will he imposed.

Commenting on the deficit, Blue and White issued a statement saying that “what remains of Binyamin Netanyahu as ‘Mr. Defense’ we see” in the continuing attacks by Gaza terrorists on southern Israel, “and now we see what remains of his standing as ‘Mr. Economy,’” referring to the emphasis of Netanyahu on Israel’s well-performing economy in speeches.