Government allocates NIS 134 billion in debt repayments • Interest repayments equal to government spending in month • Since the beginning of the year, the government has repaid a principal and interest to the National Insurance Institute in the amount of NIS 19 billion
Illustration by Dudu Greenshpan
The deficit and punishment. Due to the deficit in the 2019 budget, interest payments on government debt jumped from the beginning of the year to NIS 27.5 billion. According to data published by the Accountant General, Roni Hezekiah, in November alone, another NIS 1.7 billion was added to interest payments on government debt.
Interest payments on government debt are higher than all government spending this month, which amounted to NIS 26.4 billion. Annual interest payments are also higher than the total tax revenues in November, which amounted to NIS 26 billion, excluding amounts unrelated to the current calculation. That is, tax revenues in one month served the interest payments on the annual government debt, which grew in excess of any planning.
In addition, since the beginning of the year, the government has repaid a principal and interest on the National Insurance Institute in the amount of NIS 19 billion. Together, interest payments on government debt and repayment of the principal and interest on the National Insurance Institute totaled NIS 46.5 billion at the beginning of the year, which is 15% of the gross government budget. In this year's budget, an exception (NIS 40 billion) was planned, which is 2.9% of the budget,
But so far, there has been an exception of NIS 51 billion - 11 billion beyond its planned. According to the original plan, this year the government allocated NIS 134 billion in debt repayment - 39 billion of which was for interest payments and the rest to repay the principal. It is inevitable that the state will pay a higher interest surplus. The level of interest payments now poses a great risk, because if and when the interest rate environment changes and returns to a feasible path, this deficit will greatly hurt the economy.
