Israel is the only country in the West which has managed to reduce its debt as a proportion of GDP in 2012.

Yedioth Ahronoth has learned that the Israeli government's debt in the past year (which is calculated this week and published soon) will total some 73.5% of GDP, compared to 74.1% of GDP in 2011 and 80% of GDP five years ago.

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Debt has increased in all Western countries in recent years, and in some it has even reached more than 100% of GDP.

In the past four years, Britain's debt-to-GDP ratio has gone up by 48%, in Japan it has increased by 42%, and in the United States by 33%. The debt-to-ratio of all OECD countries has increased by 28%, in France it has gone up by 26%, in Germany – 19%, in Australia – 16%, and in Italy – 15%.

Due to the ongoing decline in state debts, Israel is also the only country in the Western world whose credit rating has increased since 2008, when the subprime mortgage crisis broke out in the US. Meanwhile, the credit rating of the US, Britain, France, Austria, Belgium and Japan was cut due to a huge increase in debts.

Yet if a state budget is not approved in the near future, Israel's credit rating may be reduced as well later this year. Despite the huge deficit in its budget, Israel has avoided increasing its debts and has even paid them back at a higher rate than in the past. As a result, the debt-to-GDP ratio is expected to drop by a further 1% in 2013.

'Major accomplishment'

In the Maastricht Treaty, signed upon the establishment of the European Union, countries were given permission to join the EU as long as their debts did not exceed 60% of GDP. That year, 1991, Israel's debts reached more than 100% of GDP. Now the Jewish state is moving closer to the European criterion, while many EU countries have deviated from it with debts exceeding 100% of GDP.

A senior Finance Ministry official told Yedioth Ahronoth earlier this week, "It's true that the Israeli economy is experiencing problems, it's true that there is a serious housing problem and cost of living , and it's true that the state budget deficit increased significantly in the past year, beyond expectations.

"But thanks to the wise activity of the Treasury's accountant general, Michal Abadi-Boiangiu, and thanks to the supervision and warnings issued by the Bank of Israel, there is an ongoing decline in the State of Israel's debts. This is a huge accomplishment, and the world highly appreciates the State of Israel for that."

Finance Minister Yuval Steinitz said recently that "Israel is leading the world in terms of reducing debt in recent years. I see it as a major accomplishment."

Only last month, Israel's dollar-denominated bond offering garnered demand of more than $9 billion from foreign investors and provided the government with its lowest ever funding costs in a dollar bond issue.