Budget data for January-November 2019

8^th December 2019

 

Bottom line:

Good news on the fiscal front?! At the least, the November data contained no bad news, which is already a relative improvement. However, the surplus reported is only ‘technical’, with the true result being a deficit (see below). Nevertheless, the 12-month trailing deficit through November was stable at 3.6% of GDP and revenues rose as a share of GDP.

December remains the critical month, because it usually sees a surge in government spending at the end of the fiscal year. Beyond that, in the absence of an approved budget for 2020, and with yet another election looming, fiscal management will effectively be paralysed.

 

Specifics:

• The ‘official’ budget performance for November was a surplus of NIS0.5bn. However, the Treasury estimates that some NIS2.2bn of tax payments were deferred from October to November, so that the true performance was a deficit of NIS1.7bn in November.
• For the 12 months ending in November, the deficit/ GDP ratio was 3.6%, exactly matching the revised target for 2019.
• Revenue as a percentage of GDP recovered from the multi-year low it recorded in October 9 (of 24.9%).
• Nevertheless, growth in tax receipts in 2019 remains moderate — up 3.3% compared to January-November 2018.
• Spending by government ministries in January-November rose by 6.7% over the same period in 2018, in line with the planned 6.6% increase. However, defence spending through November rose above its planned rate of increase, after running below target throughout the year.