The fiscal deficit surges in April

ISRAEL - In Brief 06 May 2020 by Jonathan Katz
The fiscal deficit in April reached 14.9bn ILS, compared to 4.9bn in April 19. The deficit in the LTM reached 4.8% GDP, up from 4.0% one month ago. The MoF expects fiscal revenues to decline by 60bn ILS (4% GDP) compared to the original forecast of January 20, as a result of Covid-19 crisis. In addition, the MoF expects the fiscal stimulus scheme to contribute to a higher fiscal deficit of 11% GDP this year (as does the Bank of Israel). The MoF reported that 26% of the fiscal stimulus program has been executed (or committed to) through April. We expect the fiscal deficit to be slightly lower, reaching 9% GDP this year as a result of the shutdown being cancelled (gradually) earlier than originally expected; and in our view, the difficulty in actually spending all the 80bn ILS earmarked under the fiscal stimulus scheme.

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