Israel stalls on country economical plan
Date
8/28/2024 7:52:37 AM
(MENAFN) Israeli Prime Minister Benjamin Netanyahu’s administration is facing significant delays in addressing the country’s 2025 budget, with crucial discussions stalled amid the ongoing conflict in Gaza and rising tensions with Hezbollah, according to a Bloomberg report released on Monday.
Typically, by this time of year, Israel would be well into its budget planning process. However, officials from the Israeli Finance Ministry revealed that there has been a notable lack of substantive dialogue on the budget so far. Normally, budget proposals are drafted early in the summer, submitted for cabinet approval by August, and passed by the parliament before the end of the year. A failure to finalize and pass the budget by March 31, 2025, would trigger the dissolution of the government and potentially lead to a snap election.
Despite meetings between Netanyahu and Finance Minister Bezalel Smotrich last week to discuss the budget, there has been no clear explanation for the delays. An official from Netanyahu’s office suggested to Bloomberg that the cabinet could still approve the budgetary and financial plans even if they are presented as late as October.
In the midst of this uncertainty, Amir Yaron, the governor of Israel’s central bank, has urged Netanyahu to accelerate the budgeting process. Yaron emphasized the importance of maintaining a responsible fiscal policy even during times of conflict, pointing out that financial markets are looking for stability and predictability.
Yaron highlighted the necessity of permanent budgetary adjustments amounting to approximately 30 billion shekels ($8.1 billion) for the coming year to accommodate increased defense and war-related spending. He also stressed the importance of stabilizing Israel’s debt-to-GDP ratio, underlining the critical need to adhere to the 2024 budget framework and ensure an orderly process for the 2025 budget.
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