Israel’s 2024 deficit will reach 8% of gross domestic product even if a full-scale war does not break out in the north, the Taub Center conservatively predicted in their A Picture of the Nation 2024 report, released this week.
This far exceeds the 6.6% deficit ceiling set in the updated version of the 2024 budget, in March, intended to apply until the end of the year.
The rise in debt-to-GDP ratio may “further endanger Israel’s credit rating and lead to an additional rise in interest payments,” said the center.
The report also touched on the impact the war and of the controversial judicial overhaul attempt on the shekel, saying that on the eve of the war, the devaluation of the shekel was 17% when tracking the relationship between the Shekel-Dollar exchange rate and the dollar relative to the S&P 500 index.
The excess devaluation of the shekel is still rising, according to the report, and stands at around 25% of what would have been expected before the announcement of the judicial reform.
Israel's healthcare system
Israel is the most expensive country in the OECD, the report highlighted, adding that price levels in Israel were 38% higher than the OECD average, as of 2022.
When comparing Israel to other OECD countries in terms of healthcare, Israel’s healthcare expenditure is in the bottom third, said the report.
Even when accounting for the different structure of Israel’s healthcare system, and its population age profile, Israel is still in the bottom third, it said.
The Israeli government’s share of health expenditure is also among the lowest in the OECD, with national healthcare expenditure making up 7.3% of GDP as of 2022, far below the OECD average of 9.3%, said the report.
The report also touched on Israel’s welfare system, saying that there were 747 positions for social workers unfilled as of June 2023.
This is a problem that impacted weaker municipalities more than stronger ones, and municipalities with the lowest socioeconomic score had the greatest number of unfilled positions for social workers.
“Following the sharp rise in demand with the outbreak of the war, the Ministry of Welfare and Social Affairs has increased the number of social work positions in local social service departments,” said the report adding that the number of filled positions increased by 259 to 5,784.
“The difficulty in filling positions is typical of the past decade, and, in particular, the past few years. It is linked to employment conditions, heavy caseloads, pay, and the low status of social workers,” the report added.
The Taub Center is a Jerusalem-based, socioeconomic research institute