Israel's budget deficit grew to 6% of gross domestic product for the 12 months ending on May 31, 2020, the Finance Ministry said on Sunday.
The ministry's report noted that the deficit has continued to grow since the coronavirus crisis took hold in March, rising from 3.1% at the end of February and 4% at the end of March to 4.8% at the end of April.
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The total deficit between January and May 2020 came to NIS 46.2 billion ($13.3 billion) compared with just NIS 1 billion ($288 million) in the corresponding period of 2019.
The coronavirus crisis forced the economy to come to a near standstill. As part of the efforts to stop the spread of the pandemic, the government slowed economic activity to 15%, triggering a spike in unemployment, which soared from 4% in the pre-corona economy to 26% by the end of April.
The Finance Ministry said that in May, the budget deficit came to NIS 9 billion ($2.6 billion) compared with NIS 1 billion in May 2019.
The government then introduced an unprecedented NIS 80 billion ($23 billion) bailout plan to help the economy recover from the effects of the coronavirus.
The Bank of Israel said Sunday it predicts that the budget deficit for 2020 will amount to NIS 150 billion ($43 billion) or 11.5% of the GDP.
Given that the corona bailout plan was approved without first finding sources for it in the state budget, the Finance Ministry will have to borrow money to finance it.
Domestic capital raising in May totaled NIS 18.2 billion ($5.2 billion) and overseas capital raising in bond issues came to NIS 19.9 billion ($5.7 billion).
Government spending in May came to NIS 40.6 billion ($11.7 billion), of which NIS 37.2 billion ($10.7 billion) was government expenditure: NIS 31.3 billion ($9 billion) for civilian spending and NIS 5.9 billion ($1.7 billion) for defense spending.
Since the beginning of 2020, government spending has swelled to NIS 172.5 billion ($49.7 billion).
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