rewrite this title and make it good for SEOFiscal deficit narrows due to IAI dividend

Israel’s fiscal deficit narrowed in the twelve months to the end of May 2025 to 5% of GDP, Ministry of Finance accountant general Yali Rothenberg reported today. In the twelve months to the end of April 2025, the fiscal deficit was 5.1%.

This was the eighth consecutive month that the fiscal deficit narrowed but this time only because of a fat dividend check of NIS 1.6 billion paid to the state by Israel Aerospace Industries for profits in previous years. Otherwise the fiscal deficit would have widened.

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There was a fiscal deficit of NIS 8.6 billion in May itself. The slight improvement in the cumulative deficit figure stems from an even higher deficit in May last year. Since the beginning of 2025, a deficit of NIS 15.9 billion has accumulated.

The Ministry of Finance’s original working assumption was that the deficit would continue to decline until the final quarter, during which it would climb back up and stabilize around the planned deficit of 4.9% set in the state budget for 2025. However, the resumption of intense fighting in Gaza and the call-up of reserves are pushing the deficit upward. Prolonged fighting for months ahead will push defense spending well above what was planned in the budget.

On the positive side for the Ministry of Finance, the strong flow of revenue to the state treasury continued in May and is keeping the deficit under control. State revenue last month amounted to NIS 44.8 billion. On paper, an increase of only NIS 800 million compared with May 2024. But in practice, due to tax deferrals that inflated state revenue in May 2024, the real increase in revenue is NIS 5.6 billion.

On the expenditure side, the government spent NIS 53.4 billion in May, a slight decrease of about NIS 700 million from May 2024. Since the beginning of the year, spending has totaled NIS 256.2 billion, compared with NIS 249.3 billion in the corresponding period last year – up 2.8%. This is at a time when, according to budget planning, government spending was supposed to stabilize and even fall slightly.

Published by Globes, Israel business news – en.globes.co.il – on June 10, 2025.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.