Photo: Motti Kimchi
Bank of Israel Governor Stanley Fischer
Photo: Motti Kimchi

Fischer applauds 'bold' budget draft

Bank of Israel governor says plan aimed at trimming growing deficit through tax hikes will 'avert loss of control' over spending

Bank of Israel Governor Stanley Fischer on Thursday praised a publicly criticized 2013-2014 budget draft aimed at trimming a growing deficit through tax hikes as a bold plan he thought would "avert a loss of control" over spending.


Israelis have lashed out at the budget plan and social activists have called for a series of protests ahead of a planned cabinet vote on the budget expected on Monday.


But Fischer spoke out in favor of the plan proposed by Finance Minister Yair Lapid that would entail a round of spending cuts.


"This is a bold plan," Fischer said in a statement, adding that the budget would "restore (the state) to a budgetary framework and responsible channel.


"Such a channel will avert a loss of control over the budget and in the end restore the economy to a trend of reduction of the debt burden," added Fischer, who steps down at the end of June and has long urged the government to rein in spending.


The budget draft, published on Tuesday, included cuts in state spending of about NIS 25 billion ($7 billion) between August 2013 and the end of 2014. Tax increases starting in 2014 are expected to bring in some NIS 13.4 billion ($3.75 billion).


Israel's budget deficit was 4.2% of gross domestic product last year - more than double its initial target due to overspending by the previous government and lower-than-expected tax revenues as the economy slowed.


Standard & Poor's cut Israel's local currency sovereign credit rating last week, citing "recent fiscal slippage."


Channel 2 television said on Wednesday that Lapid's popularity has plummeted, and that 42% of Israelis thought he wasn't doing a good job, compared to 21% who thought he was.



פרסום ראשון: 05.10.13, 07:32
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