Text size

The government missed its deficit target for 2011 by plenty, according to preliminary figures released by the Finance Ministry yesterday.

The deficit amounted to NIS 28.6 billion, or 3.3% of Israel's gross domestic product. The government had shot for 2.9%, which would have been NIS 25.2 billion.

What happened? Mainly, the state's income ran below expectations as the economy slowed, say the treasury chiefs.

The budget is based on estimated total income, including tax revenue and government fees for services.

Actual income in 2011 ran short of the forecast by NIS 6.3 billion, partly because of a shortfall in tax collection compared with the forecast.

Tax revenue totaled NIS 211.3 billion, or NIS 2.2 billion less than the prediction. Even so, tax revenue increased 8% from 2010, in nominal terms.

Other state income, including interest income, fell short of the target by NIS 3.5 billion.

Israel's gross domestic product amounted to NIS 864 billion, compared with NIS 810.6 billion in 2010.