ישראל כץ ובנימין נתניהו
Finance Minister Israel Katz and Prime Minister Benjamin Netanyahu
Photo: Mark Israel
Finance Minister Israel Katz and Prime Minister Benjamin Netanyahu

Finance Ministry will present $128-billion budget for 2021 to PM on Monday

Budget only NIS 15 billion higher than unapproved 2020 budget and will not include tax increases or cuts to budgets of government ministries; treasury officials project economy will grow by 4.5%-5%, compared to 2020's 7%-8% negative growth

Gad Lior, Reuters |
Published: 11.29.20 , 17:12
The Finance Ministry on Monday will present to Prime Minister Benjamin Netanyahu Israel's long-awaited budget for the year 2021 that will total NIS 426 billion ($128 billion), Ynet has learned on Sunday.
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  • Treasury officials will present their forecast for the economy for 2021, according to which the Israeli economy will gradually recover from the extended coronavirus lockdowns in the coming year and show a relatively handsome growth of 4.5%-5%, compared to 2020's 7%-8% negative growth.
    ישראל כץ ובנימין נתניהוישראל כץ ובנימין נתניהו
    Finance Minister Israel Katz and Prime Minister Benjamin Netanyahu
    (Photo: Mark Israel)
    According to the proposal, the new budget will be only about NIS 15 billion higher than the unapproved budget for 2020, which was temporarily updated in September, with the addition of NIS 11 billion to reach NIS 412 billion.
    For the first time in years, the budget will not include any tax increases and budgets of government ministries will not be cut until later in the year when needed.
    The budget includes about 50 new reforms in four areas: competition in the financial field, innovation and investments in infrastructure and high-tech, professional training for more than one hundred thousand workers and reforms in the field of imports which will increase competition in the economy.
    Unemployment bureau Unemployment bureau
    Unemployment bureau
    (Photo: Yariv Katz)
    Finance Minister Israel Katz said he intends to bring the budget to the cabinet for approval by mid-December.
    However, Israel's leaders are locked in a political standoff over the budget, so it is unclear whether the budget will be approved.
    Failure to approve a 2021 budget by March 31 would trigger a snap election, which would be Israel's fourth in two years.
    בנק ישראלבנק ישראל
    Bank of Israel
    (Photo: Reuters)
    The political squabbling has also prevented the 2020 budget from being approved. That must be approved by Dec. 23 or it could trigger a new election.
    Israel is still using a prorated version of the 2019 budget approved in 2018.
    Last week, Israel's central bank urged the government to approve a 2021 state budget as soon as possible to avoid further fiscal restraint when the economy needs stimulus to weather the coronavirus crisis.
    Israel has approved a stimulus of more than 140 billion shekels to help businesses and households cope with the effects of the virus.
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