Budget data for April and for January-April 2016

May 9, 2016

Bottom lines:

FISCAL POLICY: The budget data are still very good — but less good in April than during the first quarter. We’ll see how this develops. Meanwhile, the deficit for the 12 months ending in April remained at a level equivalent to 2.2% of GDP, so that the deficit /GDP ratio has been in the range of 2.0-2.2% for TEN STRAIGHT MONTHS.

POLITICAL ECONOMICS: Netanyahu has extracted Kahlon’s agreement to make the next budget into a two-year budget for 2017-2018. The budget data for 2015 and for January-April 2016 provide a very comfortable and unpressured starting point for planning the next budget.

Specifics:

  • The budget deficit for April was NIS1.7bn, pushing the year-to-date situation into the red, to the tune of NIS0.9bn.
  • Total state revenues were NIS24.2bn in April and NIS93.9bn for January-April. The latter is a 3.9% nominal rise over the year-earlier period.
  • Tax revenues totaled NIS21.2bn in April, only 0.4% up on April 2015. After adjusting for changes in tax rates, income from direct taxes rose while indirect tax receipts fell.
  • Compared to April 2015, income tax deductions from salaries rose, while corporate income tax receipts were stable — but payments by self-employed slumped 15%.
  • Indirect taxes were bolstered by the continued surge in vehicle imports, without which they would have been down even more.
  • Total government spending (excluding maturing debt) was NIS25.5bn in April and a cumulative NIS86.8bn for January-April, a 10.2% rise over spending in the first third of 2015.
  • Spending by civilian ministries was up 14% in January-April, while defence expenditure was 0.5% lower.

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