JERUSALEM, Aug 3 (NNN-MA’AN) – Bank of Israel Governor, Amir Yaron, warned the government against a further increase of the state’s budget deficit, said a statement issued by the central bank.
Israel’s annual budget deficit recently reached a record 88.4 billion new shekels (about 26 billion U.S. dollars), mainly due to the government’s plans, aimed to support businesses, self-employed and all citizens, amid the COVID-19 crisis.
Yesterday, the government began paying a grant of 750 shekels per citizen, with additional amounts for each child, at a total cost of six billion shekels.
A further increase in the budget is now expected to prepare for the start of the school year on Sept 1.
This requires one-time costs that need to be budgeted immediately for safe studying and minimising the risk of COVID-19 infections.
Meanwhile, the governor said that, increasing the education budget is probably essential, but “the deficit cannot be stretched indefinitely.”
He recommended that existing approved budget frameworks should be examined first, to reallocate expected unused sums for the new plans.
“In order to maintain the trust that Israel receives from global markets in financing the crisis expenses, it is important that the government will carefully examine its expenses,” the governor said.
He also recommended to set up an overall plan to increase demands and employment and accelerate growth instead of making the decisions in stages.– NNN-MA’AN
