Israel's deficit shrinks to 7.9% of GDP despite war expenses, still above annual target

Despite ongoing war expenses pushing annual spending up by 26.3 percent, Israel's deficit has improved to 7.9% of GDP in October, with state revenue climbing to NIS 398.6 billion.

By JERUSALEM POST STAFF NOVEMBER 11, 2024 21:49

Israel flag with stock market finance, economy trend graph digital technology. (photo credit: SHUTTERSTOCK)

Israel's deficit has narrowed to 7.9% of GDP from 8.5% in the previous month as of October 2024, according to a report released by the Finance Ministry.

Although the deficit was expected, given the Israel-Hamas war surpassing the one-year mark, the Finance Ministry stated that the main reason the year-end deficit is projected to exceed the budget target of 6.6% is due to uncertainty regarding US aid.

Though the war has unexpected costs, the past year has allowed for some stability as time continues. 

When the war broke out in October 2023, the month ended with a deficit of approximately NIS 22.9 billion, whereas October 2024 ended with approximately NIS 11.2 billion.

So far, this year has seen a cumulative deficit of about NIS 104.1 billion, down significantly from 2023’s NIS 154.1 billion.

New Israeli Shekel bills are seen in front of an upwards-trending graph (illustration) (credit: HADAR YOUAVIAN/FLASH90)

State revenue

In addition to the lowered deficit, state revenue reached about NIS 398.6 billion, up from last year’s NIS 371.1 billion. 

In October 2024 alone, the government spending reached approximately NIS 52.5 billion, with the total for the year at about NIS 502.7 billion, up from NIS 398.0 billion in the same period last year, marking an increase of around 26.3%.