Israel State Budget Deficit Hits 18.3 Billion Shekels in October
Israel's state budget deficit reached 18.3 billion shekels in October, bringing the 12-month trailing deficit to 3.3% of GDP. State revenues rose 10% since the start of the year, driven by strong tax collection.
Israel's state budget deficit reached approximately 18.3 billion shekels in October, up from about 15.2 billion shekels in the same month last year, according to data released by the Ministry of Finance. The cumulative deficit over the past 12 months edged up by 0.1 percentage point, rising from 3.2% of GDP at the end of September to roughly 3.3% of GDP, totaling about 74.8 billion shekels.
Since the beginning of the year, the cumulative deficit stands at approximately 47.8 billion shekels, significantly lower than the 71.5 billion shekels recorded in the corresponding period last year. The official deficit target for 2026 is set at 4.9% of GDP. State revenues in October totaled roughly 46.2 billion shekels, while cumulative revenues since the beginning of the year reached 503.3 billion shekels, marking a 10% increase compared to 457.6 billion shekels in the same period last year. Tax revenues alone grew by 12.9% over this timeframe.
Government expenditures in October amounted to approximately 64.5 billion shekels, compared to 58.6 billion shekels in October last year. Cumulative expenditures since January reached 551.1 billion shekels, reflecting a 4.2% increase that remains lower than the planned annual growth rate of 7.4%. Defense spending surged by 9.9% since the beginning of the year to approximately 153.4 billion shekels, whereas civilian ministry expenditures increased by a modest 1.4%. Compensation fund payouts since the start of the year are estimated at 10.7 billion shekels.
Tax collection in October totaled 44.6 billion shekels, representing an 8% real-terms increase compared to October last year. Excluding legislative changes and one-off factors, the rise stood at 4%. The Ministry of Finance noted that due to the Tishrei holidays, a portion of September's payments—including about half a billion shekels in VAT and several hundred million shekels in direct taxes—was shifted into early October. Real tax revenues have grown by 8% overall this year, with collection running about 16% above the long-term trendline.
