Business in Brief: January 14

Last year’s fiscal deficit beats target; Goldman predicts NIS 3.25 per dollar; Givot dampens investor enthusiasm.

By GLOBES
Shekel (photo credit: ru.jpost)
Shekel
(photo credit: ru.jpost)
Last year’s fiscal deficit beats target • By ADRIAN FILUT
The government deficit totaled NIS 30.2 billion in 2010, or 3.73 percent of gross domestic product, compared with the original budget plan of 5.5%, the Finance Ministry reported Thursday. It attributed most of the deficit to the revenue side, as well as lower interest expenses and higher-than-expected GDP growth.
Budget performance was 99.4% of the original budget in 2010, the ministry said. Nearly the full budget was used, with some ministries exceeding 100% performance, including the Defense Ministry, at 105.8%.
The Defense Ministry spent NIS 9b. overseas, or NIS 2.2b. more than planned. The defense budget totaled NIS 62b., compared with the planned NIS 55b.
Between NIS 5b. and NIS 6b. of the budget was for the Mossad and the Shin Bet (Israel Security Agency), while additional revenue came from the sale of weapons. The defense budget received a NIS 3b. supplement.
Goldman predicts NIS 3.25 per dollar • By OMER RABIN
While the Bank of Israel accumulates dollars and the Israel Manufacturers Association complains about massive damage to profits as the shekel appreciates, Goldman Sachs offers a bleak forecast on the shekel-dollar exchange rate, saying the shekel will only get stronger. Goldman Sachs predicts that the shekel-dollar exchange rate will be NIS 3.55 per dollar at the end of March, NIS 3.40 at the end of June and NIS 3.25 at the end of 2011.
The last time the shekel-dollar exchange rate was that low was in 2008, when it dropped to NIS 3.18.
That plunge prompted the Bank of Israel to launch its interventions in the foreign-currency market, and it has since bought more than $40 billion.
Givot dampens investor enthusiasm • By ADI BEN-ISRAEL
Givot Olam Oil Exploration LP, which is currently conducting hydraulic fracturing at sections of its Meged 5 well and carrying out production tests, is seeking to cool investors’ enthusiasm after Wednesday’s flare at the wellhead that indicated the presence of fuel. The scale of production, if any, is unknown, but the flare is a routine procedure during production tests, Givot Olam said.
“The partnership wishes to reiterate that incorrect information was published [Wednesday] about the flare at the well site,” Givot Olam said Thursday in a notice to the Tel Aviv Stock Exchange. “We ask investors to attach no importance to flares or their extinguishing during the production tests, or to the strength of the flare, the number of containers going out of the wellhead, or any other circumstantial information.
Investors should wait for an announcement about the results of the tests to obtain full and reliable information.”