Israel announces highest budget deficit in its history

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – Israel’s Accountant General announced Monday that the country’s budget deficit for 2020 was $50.4 billion, the highest it has ever been and three times higher than it was in 2019, Ynet News reports. The record figure was largely anticipated in light of the economic devastation wrought during the COVID-19 pandemic.

Standing at 11.7 percent of the country’s GDP, Israel’s budget deficit for 2020 is among the highest in the world percentage wise, the Times of Israel said. Only the US, Canada, the UK, Iceland and Australia have higher budget deficit figures. In 2019 Israel’s deficit was a comparatively small 3.7% of the country’s GDP.

In his statement Monday, Accountant General Yahli Rotenberg said such a high budget deficit was reminiscent of the mid-80s when Israel suffered an inflation crisis. The greatly enlarged deficit reflects a decrease in tax revenue and increase in government spending as well as a significant reduction in private consumption due to the pandemic.

On a positive report, Israel’s GDP only fell by around 3.3% last year- less than had been feared, Ynet News reported.

Moreover, according to the Bank of Israel, the country’s economy should recover quickly in 2021 if the intensity of its COVID-19 vaccination campaign is maintained, Ynet News said. Israel has led the world in getting its population vaccinated and aims to have inoculated all of its vulnerable citizens by the end of January.

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