January 6, 2019 / 5:09 PM / 8 months ago

Israel met deficit target of 2.9 percent of GDP last year: finance minister

JERUSALEM (Reuters) - Israel met its budget deficit target of 2.9 percent of gross domestic product last year, Finance Minister Moshe Kahlon said on Sunday.

FILE PHOTO: Israeli Finance Minister Moshe Kahlon attends a news conference with Prime Minister Benjamin Netanyahu announcing the appointment of the new Bank of Israel Governor, in Jerusalem October 9, 2018. REUTERS/Ronen Zvulun

Kahlon had consistently said the government would not exceed the target, despite data in recent months indicating it could be breached.

“The finance ministry met the target,” Kahlon, who has clashed with the central bank over fiscal policies for nearly four years, said in a speech. “Israel’s economy is strong.”

The government has set the same 2.9 percent deficit target for 2019.

Data issued in October had shown the deficit over the prior 12 months jumping to 3.6 percent of GDP, raising concerns of a loosening of fiscal policy.

Official data issued after Kahlon spoke showed that the deficit was 38.9 billion shekels ($10.5 billion) in 2018, or 2.9 percent of GDP.

Of the total deficit, 14.1 billion shekels came in December, the ministry said, on a surge in state spending that more than offset a 35 percent year-on-year gain in tax income.

For all of 2018, tax revenue slipped 0.9 percent.

In 2017 the deficit had stood at 1.9 percent of GDP, in part owing to one-off tax income.

($1 = 3.7021 shekels)

Reporting by Ari Rabinovitch and Steven Scheer; Editing by Kevin Liffey

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