Israel posted a budget deficit of 10 billion shekels ($2.7 billion) in May, the Finance Ministry said on Sunday, citing higher spending as a result of Israel's war with Palestinian Islamist militant group Hamas in Gaza.

Over the prior 12 months, the deficit rose to 7.2% of gross domestic product in May versus 7.0% in April, topping a target of 6.6% for all of 2024. Spending on the war, which began last October, has reached 70 billion shekels.

Tax revenue, however, bounced back in May with a 19.3% rise. Tax income is up 0.3% over the first five months of 2024. The ministry said that due to the Passover holiday in April some 5 billion shekels of tax payments were diverted to May.

($1 = 3.7577 shekels)

(Reporting by Steven Scheer, Editing by Timothy Heritage)