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The Treasury is happy: a sharp decline in the August deficit
The downward trend continues, and at the end of August it fell to 8%, which is NIS 116.9 billion, compared with 9.2% at the end of July.
According to sources in the Ministry of Finance, this is the sharpest monthly decline recorded in Israel since 2000. The decline is due to a reduction in government spending and an increase in tax revenues.
Tags
Deficit
Tax revenues
Corona
Clasp
National debt
Ministry of Finance
Sonia Gorodisky
Monday, 13 September 2021, 16:18 Updated: 16:29
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The downward trend in the deficit continues, and at the end of August it fell to a level of 8%, which is NIS 116.9 billion, compared with 9.2% at the end of July. This is according to data from the Ministry of Finance that has just been published. According to sources in the Treasury, this is the sharpest monthly decline recorded in Israel since 2000.
Recall that at the height of the corona crisis, the deficit reached 12.4% of GDP. Given these optimistic figures, the deficit target set at the budget discussions of 6.8% at the end of the year seems reasonable and some would even say conservative.
The monthly deficit for August was NIS 1.1 billion - a significant decrease not only compared to last year, but also compared to the figure for August 2019 even before the corona crisis - then the deficit was NIS 5 billion.
Expenditures in August amounted to NIS 34.5 billion, including corona expenses, and revenues in August amounted to NIS 33.4 billion.
The decrease in the deficit in the past month was due both to a significant decrease in government expenditures (of about 0.8% of GDP), and to an increase in the revenue side. And due to the fact that the economy is still operating under the continuing budget.
The increase in the revenue side is explained by a further increase in state tax revenues.
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Sources in the Ministry of Finance explained that "what allows for the sharp decline in Corona's expenditures is the fact that the government did not decide on a closure that would have led to an outline of sick leave and business compensation.
Although we have expenses for tests and vaccines, but expenses that allow the economy to continue working.
We go for a money-making strategy on testing and increasing hospital flow, but that has actually prevented sharper and higher spending.
It helps us dramatically. "
It was further stated that" we are seeing an economic recovery mainly in the services industry, in the hospitality industry, an increase in shopping.
These are very positive developments.
There is also an increase in revenue from vehicles.
Yesterday we finished routing the Arrangements Act to various committees, with the goal being that the impressive data we have will continue going forward as well.
The first discussion has already begun today and in the Finance Committee. "
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