Shuk Mahane Yehuda in Jerusalem: Government Deficit Decreases Amid Rising Revenues

Overview of Deficit Trends

Recent data reveals a surprising reduction in the government’s deficit, which fell to 4.5% of GDP in November, marking a decline of 0.4 percentage points from October figures. The government’s deficit ceiling for the economy in 2025 has been raised to 5.2%, primarily attributed to exceeding revenue expectations from various sources.

Revenue Growth

The increase in revenues plays a crucial role in this positive shift. The Chief Economist at the Ministry of Finance has projected a 30 billion shekel increase in revenue forecasts for 2025 compared to previous estimates tied to the budget’s establishment. Preliminary figures indicate that state revenues have escalated by approximately 15.1% from the previous year’s comparable period. In absolute terms, the November deficit amounted to 3.3 billion shekels, with total deficits over the past 12 months reaching 93.5 billion shekels.

Government Expenditure Insights

In terms of government spending, total expenditures in November were approximately 49.2 billion shekels, reflecting a 3.1% increase from the prior year, despite expectations for a 1.6% decrease. Notably, the additional budget approved for 2025 allows for a 3.7% rise in expenditures, contrasting with initial budget assumptions.

Monthly Revenue Figures

State revenues in November reached around 46 billion shekels, significantly higher than the 38.7 billion shekels collected in November 2024, a month marked by conflict. The latest forecasts suggest that total revenues for 2025 are expected to reach 550.4 billion shekels, representing a substantial upward revision from the original projection of 517 billion shekels.

Conclusion

These developments indicate a noteworthy shift in Israel’s economic landscape as government revenues exceed early expectations, contributing to a decline in the deficit. As fiscal policies adapt, further scrutiny and analysis will be required to understand the long-term implications of these trends on the national economy.