Public debt totaled NIS 545 billion, its lowest level in four years.
Israel’s public debt fell by 8.9 percentage points in 2006 to NIS 545 billion, or 88% of GDP, its lowest level in four years, according to Ministry of Finance estimates. Israel’s public debt fell by 14 percentage points, or $15.5 billion, in 2003-06, after rising by 15.3 percentage points, or NIS 80 billion.
Israel’s public debt as a proportion of GDP fell steadily from the start of the 1985 economic stability program to 86.7% of GDP in 2000. The subsequent recession, falling tax revenues and higher government spending, mostly for defense, reversed the trend and public debt rose to 102% of GDP in 2003. Since then, economic recovery and rising tax revenues reduced the government deficit and its proportion of GDP fell to 96.9% in 2005.
Israel’s public debt is now about 40% - 71.8 percentage points - below its peak of 159.8% of GDP in 1986. However, Israel’s public debt is still well above the OECD average of 60%.
Published by Globes [online], Israel business news - www.globes.co.il - on January 23, 2007
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