JERUSALEM, Sept. 8 (Xinhua) -- The Israeli government's 12-month budget deficit fell to 3.2 percent of GDP by the end of August, the lowest since the outbreak of the multi-front conflict in October 2023 and well below the 2026 ceiling of 4.9 percent, according to a report issued by the Israeli Ministry of Finance on Tuesday.
Over the past 12 months, Israel's deficit totaled 71.1 billion shekels (about 23.6 billion U.S. dollars), after falling 17.7 percent year on year in August alone, to 7.9 billion shekels.
Since the beginning of 2026, the cumulative deficit has reached 19.2 billion shekels, down 59 percent from the 46.8 billion shekels recorded during the same period last year.
Gad Lior, a senior analyst at the Israeli daily Yedioth Ahronoth, said that the improvement was mainly driven by an economic recovery which boosted consumer spending and tax revenues, following the war with Iran, which lasted from late February until the ceasefire in early April.
Lior also pointed to restrained government spending growth as Israel operated under a continuation budget for the first three months of 2026 before a new annual budget was approved.
Government revenues reached 410.1 billion shekels in the first eight months of 2026, up 11.5 percent year on year, while spending rose by only 3.6 percent.
