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Israel delivers first yearly budget surplus since 1987

Incoming Minister of Finance Bezalel Smotrich (L) with outgoing Minister of Finance Avigdor Liberman, at a handover ceremony in the Ministry of Finance in Jerusalem, Jan. 1, 2023. (Photo: Yonatan Sindel/Flash90)

For the first time since 1987, Israel reported a fiscal surplus. The total for 2022 reached NIS 9.8 billion, according to the Finance Ministry of Israel. This is 0.6% of the country's GDP.

The first month of the year was marked by an unprecedented net gain in revenue, bringing NIS 18 billion into the state's coffers. By November's end, the overall surplus reached NIS 28 billion. Had it not been for the largest fiscal deficit of almost NIS 19 billion in December, making it the largest for the year, the nation's finances would have recorded an even better surplus.


source: tradingeconomics.com

Traditionally, the last month of the year tends to have a large fiscal deficit as governmental agencies take advantage of any surplus in the budgetary allocation before the year runs its course.

According to the Ministry of Finance, last year was characterised by exceptional growth in state revenues, reaching NIS 468 billion, which is 13.6% higher compared to 2021.

What's interesting is that while revenue rose, the government managed to reduce its expenses during 2022 by 4.8%. It is worth noting here that the savings arose as a consequence of the nation exiting the pandemic with the government ending its state support program.

Meanwhile, GDP is expected to have expanded by 6.3% in the last twelve months, following an even quicker growth of 8.1% in 2021, when the economy was rebounding from the pandemic.

This article originally appeared here and is reposted with permission.

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