Secondly, the new budget deficit ceiling – which is lower than before – helps to cope with another problem of the Israeli economy; the heavy burden of government debt as a ratio of GDP. This is because a smaller deficit leads to a reduction in the debt-to-GDP ratio. In 2005, the government managed to continue lowering public debt by maintaining a low budget deficit.
So that at the end of 2005 public debt (of general government, that is government, local authorities and other bodies) fell to 102 percent of GDP, compared to 107 percent in 2003. By the way, the Central Bureau of Statistics plans to release its updated figures for 2005 which will show a debt-to-GDP ratio lower than this by some three to five percent.