Israel's deficit lower than expected

Israel's deficit for 2014 was 29.9 billion shekels (about 7.59 billion U.S. dollars), down 1.2 billion shekels from target, mainly due to deep cuts in social services by the government, said the Finance Ministry Tuesday.

The deficit in 2014 was 2.8 percent of the gross domestic product (GDP), versus a targeted 3.0 percent of GDP, according to figures released by the Finance Ministry's General Accountant.

The drop in deficit was attributed to an additional 3 billion shekels (about 760 million dollars) cut in child benefits, postponement of a planned pay rise for civil servants, and deep slits in transport and infrastructure development budgets.

However, deficit reduction was hampered by an unplanned rise in security spending in the wake of Israel's July and August 50-day-long conflict in the Gaza Strip.

"Defense spending increased by 6 percent, while the original budget included a plan for an annual decline of 6.5 percent," said the Finance Ministry.

Israel has stagnated over the past year, leading the economy to ascend by merely 2.6 percent in 2014, its lowest growth rate in five years. Endit