Bank of Israel slams budget as cabinet meets

October 8, 2014 02:44

Finance Minister Yair Lapid submitted his 2015 budget proposal for cabinet approval on Tuesday, as the Bank of Israel issued an unusual and sharp critique of the plan.

While the proposal set the deficit target at 3.4 percent of GDP – above the 2.5% target prescribed by the Bank of Israel to lower the national debt – BoI calculated that the deficit would add up to 3.6%. The Finance Ministry, it said, overestimated tax revenues in its calculations.

“The Bank of Israel believes that the realization of some of the measures suggested to meet the proposed deficit is quite uncertain,” the bank said.

The bank estimated revenues to be NIS 2.5 billion lower than the Finance Ministry, and put a higher price tag on Lapid’s zero-VAT housing policy.

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