(Illustration)
Photo: CD Bank
State deficits climbs to NIS 32B
Growing government expenditures and decreased tax revenue cause concern in Finance Ministry
The State deficit noted a significant rise in April reaching NIS 32 billion (about $8.44 billion), the Treasury said Sunday.
The hike was attributes to growing government expenditures and low tax revenues.
Recession
Bank of Israel governor says protest was contributing factor in drop in growth as Israeli consumer 'did not want to spend too much money'
According to the Finance Ministry's data, the period of January-April saw a NIS 3.6 billion ($949 million) deficit, which stemmed mostly from a NIS 1.7 billion ($448 million) gap in tax collection, vis-à-vis the ministry's projections.
Senior officials in the financial system have voiced their concern over the past few months' deficit increase; and Governor of the Bank of Israel Stanley Fischer even made a highly unusual statement several weeks ago advocating increasing taxes, as means of dealing, in part, with the government's growing expenditures.
The Treasury's official deficit forecast for 2012 stands at NIS 29.7 billion (approx. $7.83 billion) – or 3.4% of Israel's gross domestic product (GDP).
Israel's deficit goal is 1%-3%.
Treasury sources said that the State's tax revenue is expected to take another dip in late 2012, which will inevitably spell a bigger deficit by the end of the year.
