Money cash Shekels currency 521.
(photo credit: Reuters)
Government debt reached 73.3 percent of gross domestic product in 2011, compared
to 74.9% the previous year, the Finance Ministry announced
Government debt actually increased by NIS 24.8 billion in
numerical terms, reaching NIS 633b. The Finance Ministry said several factors
were responsible for this, including the rise in inflation and the depreciation
of the shekel against the US dollar.
Public debt, which measures the
government’s debt plus the debts of all municipal authorities, dropped from
76.3% to 74.7%.
Data provided by the Finance Ministry showed that both
government and public debt have dropped gradually over the past decade. In 2003,
government debt-to- GDP stood at 96.8%, while public debt-to- GDP stood at
“The continued decrease in our debt-to- GDP ratio, particularly
when set against the backdrop of the marked growth of other countries’
debt-to-GDP ratios, testifies to the contribution this government’s fiscal
discipline and long-term economic policies have made to economic growth and to
foreign investment in Israel,” Finance Minister Yuval Steinitz
Treasury Accountant- General Michal Abadi- Boyanjo said
credit-rating agencies place great importance on debt-to- GDP ratios when they
make their decisions.
Another increase in Israel’s sovereign credit
rating would make the country more attractive for foreign investors, she
Israel’s government debt is relatively low when compared to the
17-nation euro bloc, whose combined debt-to- GDP ratio is forecast by the
European Commission to rise above 90% this year.
However, it is still not
low enough, according to the Organization of Economic Cooperation and
Development, which recommended in its biennial report on Israel in December that
the government prioritize reducing debt to 60% of GDP by 2020.