Horror scenario: The deficit could reach 13% by the end of the year

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a a A The cumulative deficit in the last 12 months reached NIS 70.2 billion in July, which is 7.2% of GDP. This is compared to a deficit of NIS 24 billion in the corresponding period last year, according to the budget execution data published tonight by the Treasury. In June, the deficit reached 6.4%. The Treasury estimates that the deficit could reach more than 13% by the end of the year.

The effect of the corona on the deficit is divided into two layers. In the first tier, there was an increase of NIS 22.6 billion in office expenses and in the second tier a decrease in revenues following the crisis by NIS 20 billion in taxes, as well as a decrease of NIS 13 billion due to non-deposits to the National Insurance Institute.

Office expenses increased by 11% this year compared to last year (an increase in civilian offices and a slight decrease in the defense budget, which will probably be reduced towards the end of the year). Excluding corona expenditures distributed in the extra-budgetary framework, there was a 0.5% decrease in expenditure.

In terms of realizing aid expenditures, it appears that only NIS 56.9 billion was spent, which is 42% of the aid package, among other things in light of the increase in aid. In terms of expenditure per month, there is a gap between planning and execution of NIS 12.5 billion.

Tax revenues amounted to NIS 27.8 billion. At uniform tax rates, there was a 6% decrease in tax collection. Most of the decrease was recorded in indirect taxes, amounting to 12.8%.

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