Treasury report predicts deficit increase and high unemployment
The report indicates that taxes must be raised and spending cut between 2021 and 2023.
By EVE YOUNGFinance Minister Israel Katz at a meeting of the Finance Committee, July 20, 2020(photo credit: ADINA WALLMAN/KNESSET SPOKESWOMAN)
A Treasury report indicated that the deficit is expected to increase to 13.4% of the GDP, and that unemployment may reach 15%, according to Walla.The Treasury's chief economist Shira Greenberg presented a report that addresses the next three years at the government budget meeting.The deficit reached an all-time high this week, reaching 8.1% of the GDP at NIS 87.5 billion. Unemployment is currently at 10.4%, a slight decrease from July.The report went on to say that growth is expected to hit a record low of negative 5.1% by the end of 2020.In response, Treasury staff are expected to present today a forecast of government spending for the next three years, which will indicate that taxes must be raised and spending cut between 2021 and 2023. The report shows that if these steps are not taken, the deficit in 2021 will be 6.5% of the GDP before accounting for coronavirus spending.
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