Israel’s fiscal deficit continues to shrink. The deficit for the twelve months to the end of March was NIS 23.4 billion, 1.4% of GDP, after a 2.2% deficit for the twelve months to the end of February, the Ministry of Finance Accountant General reported today.
March was the third individual month in succession in which there was a fiscal surplus. Since the beginning of the year, Israel has recorded a fiscal surplus of NIS 23.4 billion.
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The twelve-month deficit as a proportion of GDP is at its lowest since 2008. A year ago, it stood at more than 12%.
State revenues for January-March totaled more than NISD 125 billion, 29.3% more than in the corresponding period of last year. Alongside the growth in revenues, the Ministry of Finance has benefited from a decline in expenditure, down 15.2% within a year, to NIS 102 billion. The main reason for the decline is the ending of the state’s safety net for businesses and the unemployed during the coronavirus pandemic.
Last week, Minister of Finance Avigdor Liberman announced a NIS 0.50 per liter reduction in the excise on fuel. Liberman explained that the growth in state revenues allowed him to make the reduction, and it now turns out that the rise in state revenues from the fuel excise in March alone was enough to finance part of the move. Revenue from the fuel excise totaled NIS 1.9 billion in March 2022, 23% more than in March last year.
State revenues from direct taxes jumped by no less than 26.6% in the first quarter of 2022 in comparison with the corresponding quarter of 2021. Revenues from indirect taxes grew 12.2%, while revenue from fees grew 10.4%.
Revenues from taxes om imports, on the other hand, fell 14% in real terms in March to NIS 1.9 billion. The Ministry of Finance explains the decline by “relatively moderate imports of vehicles in March 2022 as a result of a continuing shortage of microprocessors for vehicles, and also of the crisis in Ukraine which has hit the supply chain of components and has also led to a shortage of raw materials.”
Published by Globes, Israel business news – en.globes.co.il – on April 10, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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