For the first time since Benjamin Netanyahu began his second term as Israel’s prime minister in 2009, Israel’s debt burden is rising.
The government’s debt-to-gross domestic product ratio rose to 59.4% in 2018 from 58.8% the previous year, the Finance Ministry has said.
The shekel’s weakening against the dollar and euro, along with rising inflation, added to Israel’s debt burden last year, the ministry said. Israel’s widening budget deficit also has implications for the overall debt burden.
Fitch Ratings on Monday forecast that Israel’s debt-to-GDP ratio would “edge up further” over the next two years due to growing deficits.
Israel’s central bank has urged the next government to take steps to reduce the deficit. The results of recent elections, in which religious parties that typically demand money for their constituents gained seats, could complicate those efforts.
Government debt amounted to 788.3bn shekels at the end of 2018, up from 747.1bn shekels a year earlier. Public debt-to-GDP rose to 61%, from 60.5%.
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