The Jerusalem Post quotes an announcement by Israel’s Finance Ministry according to which government debt rose by 4.9% percent during the first six months of 2009, to NIS 574 billion, from NIS 547 billion at the end of 2008.



According to the Finance Ministry's Government Debt Management Department, the increase was led mainly by the raising of NIS 26 billion in bonds during the second quarter.



Israel's ratio of debt-to-gross domestic product, which constitutes a measure of the country's ability to repay debt, stood at 78% in 2008. It is estimated to have risen to 82% during the first half of 2009 due to debt increase.



The 78% level in 2008 was already high in comparison to other countries. The average for OECD countries last year was 57% of GDP.



The Bank of Israel stated last month that there was "great uncertainty" as to whether the government would be able to reduce the debt-to-GDP ratio after 2010, as a result of plans to increase spending and cut taxes.



Prior to the current crisis, the government had been reducing the ratio, which reached a peak of 100% in 2003. The goal was to bring it down to about 60%, which according to the International Monetary Fund is the standard for developed countries.



In the government's budget proposal for this year and next, which was recently approved by the Knesset, the debt-to-GDP ratio is projected to climb to 87% after five years of steadily declining debt levels.