The 2013 state budget deficit is likely to be greater than the deficit in 2012
A NIS 4.6bn deficit was recorded in the state budget in the first quarter of 2013, compared to a NIS 1.6bn deficit recorded in the first quarter of last year. Government expenditure expanded during this period by 1.3% compared to the January – March 2012 period. In this regard, it is important to remember the government has been acting since the beginning of this year without an approved budget framework. As can be seen in the accompanying graph, the path of the deficit in recent months is consistent with an annual deficit that is not below that from last year (4.2% of GDP). The main explanation for the increase in the deficit is the drop in tax revenues. This is the result of the slowdown in economic activity.
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