Budget Deficit On Track To Fall To 4.2% Of GDP In 2010

BMI View: Israel has made headway on reducing its budget deficit so far this year, and we expect the end year deficit to narrow to US$1.1bn (4.2% of GDP) in 2010, from 5.1% of GDP in 2009. This is driven by the declining growth rate in government expenditure owing to more austere fiscal measures against a backdrop of economic recovery, and this view is supported by the latest data release by the Ministry of Finance. The Ministry has revealed that the budget was in surplus to the tune of ILS46mn (US$12mn) in May 2010. However, we are comfortable with our

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