The Finance Ministry has released its initial deficit estimate of 39 billion shekels for 2012 — a substantially higher deficit than the 18.3 billion shekel deficit forecast for the original 2012 budget. A 12.8 billion shekel deficit was registered in the month of December alone.
The deficit represents 4.2 percent of the GDP, whereas, according to the Central Bureau of Statistics, 2012 was expected to conclude with a GDP of 929.8 billion shekels, making the initial projected deficit of 18.3 billion shekels only 2% of the GDP.
The reason that the deficit was so much larger than expected was that tax revenue ended up being 18.5 billion shekels lower than expected due to an economic slowdown. In addition, state expenditure was 2.2 billion shekels higher than originally planned.
Thus, in 2012, the government spent 285.6 billion shekels, as opposed to the originally planned NIS 283.4 billion.
The expenses by government ministries were 238.7 billion shekels, compared to the originally planned 235.7 billion shekels. The total expenses of government ministries in 2012 were 7.1% higher than in 2011.
The expenditures made by government ministries dealing with civilian issues (like education, health, etc.) were 8.5% higher than in 2011 while the defense establishment spent 3.4% more than in 2011.
In terms of total revenue, the government's income was NIS 18.5 billion shekels lower than anticipated in the original budget. The tax revenue totalled 218.6 billion shekels, 13.7 billion shekels lower than projected in the original budget. This was 3.4% more than the tax revenue in 2011.
The deficit to be financed was 34.6 billion shekels. This was done by issuing government bonds in Israel and abroad totalling 36.6 billion shekels, as well as by privatizing government-owned land totalling 0.9 billion shekels.
As a result of attempting to finance the deficit, the government's surplus in the bank rose to 2.9 billion shekels.