Finance Report for 2019: Thanks to preparations in previous years, Israel raises funds easily and cheaply • In the days before the corona, a deficit of 3.9% was an exception
The economy entered a crisis in a stable state (those photographed have nothing to do with the article)
High growth, low unemployment, doubling the health system budget, a huge liability for budgetary pensions and a good entry point into the corona crisis - these are the bottom lines in a report published yesterday (Tuesday) by the Ministry of Finance on Israel's economic performance in 2019, before the corona eruption.
"The growth of the Israeli economy in recent years has ranged from 3.3% to 4% - significantly higher than the OECD average in almost every year," notes Roni Hezekiah, the Accountant General and author of the report. According to Hezekiah, "The country entered a crisis with a debt ratio 60% of GDP, following a decline from the 100% debt-to-GDP ratio environment about two decades ago.
The deficit in Israel in relation to GDP has ranged from 2% to 3.9% over the past decade, and for every small deviation from the deficit target, there has been a lively debate indicating high fiscal discipline.
"The unemployment rate at the end of 2019 was 3.9%, lower in historical terms and in an international comparison," the Treasury said, even though it was a deviation from the target.
Virus resistant system
According to the report, the deficit in the state budget in 2019 amounted to about NIS 52.2 billion, which constitutes about 3.7% of GDP for this year. Civil expenditures amounted to about 73.3% of total expenditure (compared to 72.3% in the previous year) and about one-fifth of GDP (about 19.5% In the previous year).
Defense system expenditures amounted to about 18.8% of expenditures (19.6% in the previous year), and about 5% of GDP - similar to 2018. Interest payments amounted to about 7.9% of expenditures and about 2.1% of GDP, a slight decrease compared with the previous year.
The reports show the continuation of the upward trend this year in relation to civilian expenditures from total expenditures and GDP, at the expense of defense expenditures and interest expenses on debt, which decreased.
Hezekiah notes that the health budget, "which has risen steadily each year over the past decade by a total of about 100%, has created a more resilient and prepared system for dealing with the virus, even if it still needs additional resources."
The gross budget execution of the Ministry of Health amounted to NIS 43 billion in 2019, the gross budget execution of social ministries increased between 2012 and 2019 by more than NIS 70 billion and in 2019 amounted to NIS 194 billion gross - about 50% of total expenses The offices (excluding debt repayments and business enterprises).
Accompanied by reasonable prices
According to the Accountant General, Israel's high credit rating, AA-, which allows it to borrow in international markets at affordable prices, "has also proven itself at the height of the corona crisis in fundraising abroad, which along with doubling and increasing debt in the domestic market, is needed to cope with the jump. Significant in terms of funding needs. "
One of the most outrageous figures in the report indicates a huge liability of NIS 866 billion for a budgetary pension. This amount does not include the mediation pensions paid by the army to permanent personnel, with an estimated actuarial cost of NIS 285 billion. That is, a total pension liability of 1.15 Trillion shekels - close to three times the state budget approved a few days ago.
The amounts are only inflating: the total liabilities for workers' rights, including the budgetary pension, have jumped more than 22% in the past year, compared to 2018. The defense system retirees lead the list of budgetary pension recipients with NIS 243.2 billion, and teaching staff sweeps about 104 billion - An average actuarial cost of about NIS 1.7 billion per employee.