Pandemic Punches Biggest-Ever Budget Hole

YERUSHALAYIM -
The Israeli Ministry of Finance’s main office building in Yerushalayim. (Assaf Luxembourg)

Israel’s state budget deficit for the year 2020 was its highest ever, at 160.3 billion shekels ($50.4 billion) – 11.7 percent of its GDP, according to the Finance Ministry.

The staggering figure – triple that of 2019 – was anticipated as a result of emergency spending to help Israelis through the financial crisis caused by the COVIS-19 pandemic.

As a percentage of GDP, Israel has one of the highest deficits in the world, after the U.S., Canada, the U.K., Iceland and Australia, Ynet reported.

The GDP itself, however, fell only 3.3%, less than the Ministry’s experts had feared.

Meanwhile, the shekel continued undaunted, strengthening on Monday against the dollar and the euro. In evening inter-bank trading, the shekel was at NIS 3.178/$ and at NIS 3.861/€, according to Globes.

The shekel’s performance was said to reflect the sluggish rollout of the COVID vaccine in Europe and North America compared to Israel. The European slowness was blamed on ill-preparedness and bureaucracy; but somehow Israel, notorious for its bureaucracy, has managed a world-leading vaccination drive.