Israel's Fiscal Deficit Narrows to 3.3% of GDP as June Tax Revenues Jump 28%

Israel's rolling 12-month fiscal deficit narrowed to 3.3 percent of GDP through June 2026, down from 3.75 percent at the end of May and well below the government's 4.9 percent year-end target, according to a preliminary June budget execution report from Finance Ministry Accountant General Michal Abadi-Boiangiu. June state tax revenues surged 28 percent year-over-year to 45.2 billion shekels, with direct taxes climbing 31 percent on vehicle imports, financial-sector deductions and corporate profits, indirect taxes rising 19 percent and fees up 27 percent. The June monthly fiscal deficit fell to 8.6 billion shekels from 16.8 billion shekels a year earlier, and year-to-date state revenues reached 307 billion shekels, an 11 percent increase over the same period in 2025. Finance Ministry Chief Economist Shmuel Abramson attributed part of the June strength to a base effect from June 2025 activity depressed during the Iran war.