This weekend, Jews celebrated their new year. In parallel, Israel’s finance ministry released statistics revealing that the budget deficit, which has grown alarmingly since 2011, is finally under control. More money for the voters?

Why the good cheer? First some background.

The outgoing deputy of the Bank of Israel, Dr Karnit Flug, admitted recently that authorities had been caught unawares by the severe downturn in taxes during 2012. The overestimate reached 18 billion shekels, close to US$5 billion. The real estate and stock  markets underperformed. And as a global straight jacket meant that overseas markets could not take up the slack, unemployment rose and this in turn resulted in a smaller tax base.

By the summer of 2013, Israel’s new government eventually introduced a combination of tough measures including cuts in government budgets and an increase in VAT.

However, it now appears that the initial stats for 2012 were inaccurate. The income per average family was nearly 10% higher than first calculated. The budget deficit was not 4.2%, as first feared, but a mere 3.8%. In comparison to GDP, the debt was only 68.5%, a fact which many other members of the OECD can only dream about for the next few years.

There are four apparent reasons for the welcoming news. First, governments around the world have been changing the methodologies by which such numbers are collected and added up. OK, an accounting trick, but let us welcome it for the moment. And as I mentioned, taxes have been raised. Third, as the government did not approve a budget for 2013 until roughly June this year, it was forced by law to operate within the framework of the previous numbers on a pro rata monthly rate. In other words, over spending became illegal. Finally, Israel’s coffers have benefitted from a number of large deals, which have seen extensive tax dividends. One significant example of this was when Warren Buffet completed the purchase of Iscar in May 2013.

The budget gap is down to around 13 billion shekels or 3.3%.

More money for the voters? More to invest in r&d? Back to grandiose changes in the transportation set up? Who knows. The government in Jerusalem does not need to face an election for nearly three years. However, this must be welcome news for overseas investors and the global money markets.