Budget Data for November and January 2013
Bottom line: The budget deficit renewed its downtrend in November, as revenues posted strong gains and spending remained firmly under control. As expected, the uptick in the deficit in October proved to be a blip.
- The government budget for November was almost balanced, with a deficit of only NIS0.7bn. The cumulative deficit for January-November 2013, at NIS18.9bn, was almost 30% less than in the parallel period of 2012.
- It is likely that the December deficit will be very large, as ministries race to spend their budgets for the year — or risk losing them. Most ministries still have considerable room to spend before approaching their ceilings. Only the Defence Ministry has already exhausted almost its entire budget and will likely overrun even the additional spending allotment granted it.
- However, even if the deficit for December balloons to over NIS10bn – as it did in the December of both 2011 and 2012 – the full-year deficit for 2013 will still be far below the NIS45.6bn estimated in the 2013 budget.
- Government revenues remain in line with the 2013-14 budget framework. Even discounting for the legislative changes that raised tax rates for and during 2013, November revenues climbed 15% in real terms, compared to November 2012.
This was primarily the result of direct taxes, notably income tax, comfortably exceeding projections. November revenues were boosted by receipt of one-off payments of corporate income tax,to the tune of several billion shekels, as several large companies took advantage of the offer made by the Treasury to free “captive profits” by paying a low tax rate.
Graph: Monthly budget surplus/ deficit, November 2011 – November 2013 (MLN NIS)