February budget data show strong revenue growth

ISRAEL - In Brief 09 Mar 2026 by Sani Ziv
Against the backdrop of the war entering its 10th day, the Ministry of Finance yesterday published the budget results for February. As in previous months, the data surprised on the upside, with government revenues exceeding expectations. In real terms and at constant tax rates, tax revenues in January-February 2026 increased by 11.6% compared with the same period in 2025. Within this total, revenues from direct taxes rose by 14.1%, while indirect taxes increased by 7.6%. In February itself, tax revenues increased by 21% year-over-year in real terms and at constant tax rates, with direct taxes rising by 21.8% and indirect taxes by 19.6%. The chart shows the evolution of Israel’s fiscal deficit together with government revenues and expenditures as a share of GDP. The gray line represents expenditures and the blue line revenues. Following the war in late 2023, spending increased and revenues declined, pushing the deficit to a peak of about 8.4% of GDP in 2024. Since then, the deficit has gradually narrowed to around 4.7% of GDP as tax revenues rebounded, although spending remains high.Government expenditure totaled NIS 50.0 billion in February 2026, compared with NIS 45.4 billion in the same month last year, an increase of 8.4% year-over-year. Since the beginning of the year, government spending reached NIS 92.9 billion, up from NIS 85.7 billion in January-February 2025. Overall, the Ministry of Finance reported a fiscal deficit of NIS 2.2 billion ($0.7 billion) in February 2026, with the trailing 12-month deficit declining to 4.7% of GDP, from 4.9% in January. Budget deficit, expenditure, and revenues(Cumulative 12-month, % of GDP)Source: Israel Ministry of Finance, Acco...

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