Only four countries finished the year 2022 with a higher budget surplus than Israel - Norway, Singapore, Denmark and Ireland. This is according to the Ministry of Finance's annual budget review published today.
Only four countries finished the year 2022 with a higher budget surplus than Israel - Norway, Singapore, Denmark and Ireland.
This is according to the Ministry of Finance's annual budget review published today.
The report also shows that public spending in Israel will decrease in 2022 at a higher rate than the OECD average.
Public spending for 2022 in Israel stood at 37.8% of GDP, compared to 42.6% of the average of developed countries.
Public spending is defined as all the sums spent by the government and local authorities such as salaries of state employees, payment of budget pensions, public construction such as roads, bridges, etc.
The Treasury mentions that in 2022 a budget surplus of about NIS 9.8 billion was recorded, which is about 0.6% of GDP - the first year in which a surplus was recorded since 1987.
The preparations for the 2018 budget by the people of the Ministry of Finance, photo: Oren Ben Hakon
It should be noted that the international comparison of the budget surplus is based on forecast data from the International Monetary Fund published in October.
The figures are published after a series of international reviews released in recent days, in which the world's largest banks warn against the economic consequences of the Levin reform.
Israel ended 2021 with a government deficit of approximately NIS 69.2 billion, which is approximately 4.4% of GDP.
The sharp decrease in the deficit and the transition to a surplus was due to an increase in tax revenues in the amount of about 52.6 billion shekels and a decrease in the expenses of the economic plan to deal with Corona in the amount of about 47 billion shekels.
Public spending has been on a downward trend since 2003
The Treasury's report shows that government spending in 2022 was about 26.2% of GDP, and that public spending was the same as the average in the reference countries (Czech Republic, Slovakia, Slovenia, Estonia, Malta, Singapore and Taiwan).
However, in 2022 there was a decrease in public spending in Israel of approximately 2.6% of the GDP compared to a decrease of approximately 1.7% - the average of the developed countries, and a decrease of approximately 0.9% of the average of the reference countries.
The Treasury explains that the main reasons for the high decrease in public spending in international comparison are the sharp drop in Corona spending and the high nominal growth of GDP.
Between the years 2000-2008, public spending in Israel was higher than the median spending of the developed countries, and even reached a peak in 2002 and approached the 90th percentile.
Starting in 2003, there was a downward trend in public spending in Israel, and starting in 2009, the scope of public spending even fell below the median spending of the developed countries, a trend that strengthened in 2021 and brought Israel in 2022 to a lower spending of about 6.5% of GDP than the median spending of the developed countries.
Accountant General, Yehli Rotenberg: "The year 2022 continued the trend of recovery of the Israeli economy. GDP growth in 2022 was over 6%, the picture of tax revenues was extremely high, therefore even though government expenditures were significant and amounted to approximately 459 billion shekels (including Corona ) - the year ended with a surplus".
Senior Deputy to the Accountant General, Lior David-Pour: "The annual report joins a series of steps to increase transparency in the execution of the budget and even includes a dashboard for the execution of the budget, the revenues and the deficit that will be published every month, and this is to make the information more accessible and to deepen the ability to analyze it."
were we wrong
We will fix it!
If you found an error in the article, we would appreciate it if you shared it with us