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Israel’s government debt at NIS 984 billion – up 20% in 2020

CM 20/04/2021


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Israel’s total government debt rose by 20 percent in 2020 to NIS 984 billion, according to a report published Tuesday by the Accountant General of the Finance Ministry. That will likely require Israel to take measures to increase tax revenues in the near future, including the possibility of raising tax rates.Covering the coronavirus crisis required raising approximately NIS 265 billion in 2020, compared to NIS 137 billion in 2019, the report said. Further bond issues will be required in 2021.Israel’s ratio of public debt as a percentage of GDP ballooned to 72.4%, compared to 60% a year earlier and the State’s highest in ten years. However, The rise was lower than forecast due to several market factors, including the strength of the shekel against the US dollar in 2020, the negative rate of inflation, and higher than forecast GDP growth. Israel’s increase in the debt to GDP ratio was slightly below the average among other countries.Israel’s economic position declined less than other countries during the pandemic, and its credit ratings are considered excellent. S&P Global Ratings recently affirmed the State of Israel’s AA- rating, with a “stable” outlook, and Fitch Ratings recently affirmed Israel’s A+ rating and “stable” outlook. In April 2020, Moody’s Investors Service affirmed Israel’s A1 rating and updated its outlook to “stable”.“Professional management of the Government debt, combining long-term strategy and tactical short-term adjustments, in addition to the accommodating market conditions supported the Government’s ability to significantly increase the scope of debt-raising to deal with the massive support required by the economy during the corona crisis,” said Accountant General Yali Rothenberg.”At the same time, the broad increase in debt-raising, derived from the economic situation, led to a rise in the debt-to-GDP ratio in 2020. Looking forward, significant plans will be needed to help ensure future economic growth. At the same time, it is very important to reduce the deficit once the crisis is over and return to the steady downward trend in the debt-to-GDP ratio.”“The outbreak of the coronavirus and its negative effects on the capital markets and macroeconomy, predominantly the sharp rise in the government deficit brought about by an increase in government expenditure and a drop in government revenue, resulted in 2020 being a record year for debt-raising with more than NIS 260 billion raised,” added Senior Deputy Accountant General and Head of the Financing Division Gil Cohen.

“The ability to meet these exceptional financing needs, in an uncertain and volatile period, is evidence of Israel’s resilience and showcases the faith investors in Israel and abroad have in the strength of the State’s economy and ability to meet its obligations.”
Source: Jerusalem Post

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CM

The host of Coffee Mouth Scare Crow Show and CEO of 452 Impact, Inc. Here is food for thought. Romans 6:23 "For the wages of sin is death; but the gift of God is eternal life through Jesus Christ our Lord." John 3:16 "For God so love ed the world that he gave his only begotten Son, that whosoever believeth in Him shall be saved."

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