Kulanu leader Moshe Kahlon.
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
April's government deficit ticked up on high spending and low tax revenues, though it may still be on the seasonal path needed to hit the 2.9% of GDP deficit target (NIS 35 billion) Finance Minister Moshe Kahlon set for the year.
In April, the monthly deficit hit NIS 1.7b, a major increase over the NIS 0.4b deficit from last April. In 2015, the government was operating on a month-to-month automatic budget based on the 2014 budget, because the Knesset had failed to pass the 2015 budget.
The cumulative deficit for the first four months of the year amounted to NIS 0.9b, but last year it was a NIS 0.1 billion surplus, a NIS 1 billion difference.
That year, however, the budget deficit came out well below the 2.9% target at 2.15%. The rolling 12-month deficit remained stable at 2.2% of GDP.
The reason for the NIS 1 billion deficit difference with the previous year was that April revenues dropped by .9% as compared with April of 2015. They were still 3.7% higher in first three months, mostly from an 8.6% disparity between forecast and actual indirect tax revenue (e.g. import VAT and local taxes).
Spending on civil government ministries was up 14%, while defense spending dropped .5% in comparison to last year.
In the Bank of Israel's interest rate discussion for May, which like the Finance Ministry deficit figures was released Sunday, the monetary committee showed little concern for the deficit differences.
Through March, the report said, the deficit was "about NIS 1.5 billion higher than the seasonal path consistent with achieving the deficit target for 2016."