Israel Only Country in West to Reduce Debt
February 26, 2013
Government’s debt-to-GDP ratio expected to total 73.5% in 2012 compared to 74.1% in 2011. Israel also only country in West whose credit rating has increased since 2008
Israel is the only country in the West which has managed to reduce its debt as a proportion of GDP in 2012.
Yedioth Ahronoth has learned that the Israeli government’s debt in the past year (which is calculated this week and published soon) will total some 73.5% of GDP, compared to 74.1% of GDP in 2011 and 80% of GDP five years ago.
In total, the State’s debts today amount to NIS 720 billion (about $194 billion). The GDP is close to NIS 1 trillion ($267.5 billion)
Debt has increased in all Western countries in recent years, and in some it has even reached more than 100% of GDP.
In the past four years, Britain’s debt-to-GDP ratio has gone up by 48%, in Japan it has increased by 42%, and in the United States by 33%. The debt-to-ratio of all OECD countries has increased by 28%, in France it has gone up by 26%, in Germany – 19%, in Australia – 16%, and in Italy – 15%.
Due to the ongoing decline in state debts, Israel is also the only country in the Western world whose credit rating has increased since 2008, when the subprime mortgage crisis broke out in the US. Meanwhile, the credit rating of the US, Britain, France, Austria, Belgium and Japan was cut due to a huge increase in debts.
Yet if a state budget is not approved in the near future, Israel’s credit rating may be reduced as well later this year. Despite the huge deficit in its budget, Israel has avoided increasing its debts and has even paid them back at a higher rate than in the past. As a result, the debt-to-GDP ratio is expected to drop by a further 1% in 2013.
‘Major accomplishment’
In the Maastricht Treaty, signed upon the establishment of the European Union, countries were given permission to join the EU as long as their debts did not exceed 60% of GDP. That year, 1991, Israel’s debts reached more than 100% of GDP. Now the Jewish state is moving closer to the European criterion, while many EU countries have deviated from it with debts exceeding 100% of GDP.
A senior Finance Ministry official told Yedioth Ahronoth earlier this week, “It’s true that the Israeli economy is experiencing problems, it’s true that there is a serious housing problem and cost of living, and it’s true that the state budget deficit increased significantly in the past year, beyond expectations.
“But thanks to the wise activity of the Treasury’s accountant general, Michal Abadi-Boiangiu, and thanks to the supervision and warnings issued by the Bank of Israel, there is an ongoing decline in the State of Israel’s debts. This is a huge accomplishment, and the world highly appreciates the State of Israel for that.”
Finance Minister Yuval Steinitz said recently that “Israel is leading the world in terms of reducing debt in recent years. I see it as a major accomplishment.”
Only last month, Israel’s dollar-denominated bond offering garnered demand of more than $9 billion from foreign investors and provided the government with its lowest ever funding costs in a dollar bond issue.
Similar posts
-
Israel Is Held To A Higher Standard Than Any Country
April 25, 2024In the intricate tapestry of global affairs, one nation stands out for enduring scrutiny and condem...
-
Israel Has The Most Moral Military In The World
April 10, 2024In the heart of a region often riddled with conflict, Israel stands out not only for its technologi...
-
The Resilience of the Israeli People
April 2, 2024Visitors from around the world have seen Hamas's October 7th Massacre's destruction in southern Isr...
-
Israel: Small Size, Big Impact
March 21, 2024Nestled along the eastern edge of the Mediterranean Sea, Israel is a land of immense historical sig...
-
Israelis Are Fighting For Their Lives
February 21, 2024By Jonathan S. Tobin The world looks a lot different from Kibbutz Kfar Aza than it does in the U...
-
Over 2 Million Arabs Live In Israel
January 23, 2024In the complex landscape of the Middle East, where diverse cultures and identities intersect, Israe...
-
'Fauda' Star Idan Amedi Injured Fighting in Gaza
January 8, 2024Despite the severity of his injuries, Amedi's father assured Israeli news channels that his life is...
-
Israel Is A Great Country To Live In
December 28, 2023Nestled at the crossroads of the Middle East, Israel stands as a vibrant and dynamic nation, offeri...