Financial deficit in Israel rises by 4.9% despite January surplus

SadaNews - Israeli government data revealed that the annual financial deficit has risen to approximately 4.9% of GDP, an increase of 0.2 percentage points compared to the previous month, due to the inclusion of data from last year in the annual accounts, according to a report by the Israeli newspaper Calcalist. Government revenues in January 2026 reached about 59.7 billion shekels (19.1 billion dollars at an exchange rate of approximately 3.12 shekels to the dollar). The report indicates that these revenues are the highest since January 2025, yet they are considered biased upward and do not reflect the actual performance of the budget in the absence of an approved budget. In contrast, government spending in January 2026 was about 42.8 billion shekels (13.7 billion dollars), the lowest level since January 2025, attributed partly to the lack of an official budget and reliance on a transitional budget that constrained the pace of spending. The first month of 2026 ended with a surplus of 16.9 billion shekels (5.4 billion dollars), a typical surplus for January each year, but it is about 6 billion shekels lower than the surplus of January 2025, which amounted to 22.8 billion shekels (approximately 7.3 billion dollars). Although the transitional budget allowed for monthly spending of up to 50.5 billion shekels (about 16.2 billion dollars), the government actually spent only 42.7 billion shekels during the month, reflecting a discrepancy in resource management in the absence of an approved budget. The Calcalist report emphasizes that these results do not reflect the true financial picture, as an annual deficit of 4.9% of GDP highlights the continued deterioration in the financial situation despite the apparent monthly surplus, especially after excluding the impact of exceptional months from the annual accounts. According to Calcalist, the data reveals structural challenges in public financial management, where the positive monthly figures obscure a fragile reality in the budget, increasing the risks of financial pressures in the coming period.