Israel in 2020 suffered its highest-ever budget deficit of $50.4 billion (160.3 billion shekels), the Finance Ministry announced.
Due to the harsh economic effects of the coronavirus pandemic, the Treasury said that the deficit, which is three times higher than that of 2019, amounts to 11.7 per cent of the country's gross domestic product (GDP).
Last year, Israel approved a multi-year stimulus package of more than 208 billion shekels ($65.8 billion) to help businesses and households cope with the effects of the virus.
Israel's deficit was the sixth highest in the world in 2020, after the UK, Canada, United States, Iceland, and Australia.
According to the Finance Ministry, Israel's deficit grew by 7.9 per cent in 2020, however, overall, Israel's GDP only dropped by 3.3 per cent, less than the global projection for most western economies which was expected to be 5.5 per cent.
Last week, the Bank of Israel announced it expects the economy to rebound quickly in 2021 if the country's fast start to vaccinating people against COVID-19 is maintained.
The bank left its benchmark interest rate unchanged at 0.1 per cent for a sixth straight meeting, in line with analysts' forecasts.
Israel has begun to vaccinate its population at one of the quickest rates in the world, and it aims to reach all vulnerable citizens by late January.
The central bank forecast that if the rapid rate of inoculation was maintained, the economy would grow 6.3 per cent in 2021 and 5.8 per cent in 2022.
Growth this year would only reach 3.5 per cent, however, if the vaccination rate slowed, the bank's economists said in their latest forecasts.
The COVID-19 infection rate continues to rise in Israel, with the Health Ministry reporting nearly 9,589 new cases yesterday, taking the total number since the start of the pandemic past the half-million mark, with 504,269 diagnosed.