Finance Minister Moshe Kahlon speaks during a ceremony whereby Amir Yaron is sworn in as Bank of Israel governor by President Reuven Rivlin, in the presence of Prime Minister Benjamin Netanyahu, in Jerusalem December 24, 2018.
(photo credit: AMIR COHEN/REUTERS)
The State of Israel achieved its 2018 government budget deficit target of 2.9% of gross domestic product, Finance Minister Moshe Kahlon told ministry employees on Sunday.
“The Israeli economy is a strong one, but more importantly, Israeli society is stronger today than four years ago,” said Kahlon.
“Israel’s economy is in its best condition to date, and the proof lies in the facts. Under our watch, both the economy and the citizens are strong. We will continue the revolution of the Israeli economy for all Israeli citizens.”
Despite analysts predicting in recent months that the Finance Ministry would not achieve its end-of-year targets, Kahlon said standing by their objectives set at the beginning of 2018 was proof that they have responsibly managed the growth of the market.
According to initial data provided by the ministry, the 2018 deficit stood at NIS 38.9 billion, or 2.9% of GDP. In 2017, the deficit was NIS 24.6b., 1.9% of GDP.
While the deficit is similar to that of the original budget, both revenues and expenditures were higher than forecast during 2018 by NIS 0.7b. and NIS 1.1b., respectively.
“In our newspapers, they might say we played with the numbers,” Kahlon added. “Friends, don’t let them tell you stories. There is no such thing as playing with numbers. All these numbers are monitored by international companies, such as Moody’s, S&P and the World Bank.”
Concerns have been raised regarding the level of Israel’s budget deficit, including in the OECD's latest economic forecast summary
for Israel, published in November 2018.
“The planned budget deficits are high for this stage of the cycle,” the OECD said in its report.
“Steady fiscal consolidation will be needed to reduce public debt relative to GDP and ensure room for maneuver in the next downturn,” according to the report.
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