Israel’s Cabinet today approved Finance Minister Yair Lapid’s proposal to raise the government’s budget deficit limit to 4.65 percent of gross domestic product from an initial 3 percent target.
The decision comes just three days after Standard & Poor’s lowered the country’s local currency rating to A+/A-1 from AA- /A-1+, citing “recent fiscal slippage.” The S&P downgrade came hours after Lapid’s proposal to raise the deficit to 4.9 percent was reported. Lapid backpedaled following the downgrade and criticism from analysts.
Prime Minister Benjamin Netanyahu called early elections in October after concluding he would not win government approval for the budget cuts necessary to reach the 3 percent deficit target. Parliament has less than three months to approve the spending plan.
To contact the reporter on this story: Alisa Odenheimer in Jerusalem at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew J. Barden at email@example.com