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He pointed out SmotrichDuring his speech before the Finance Committee in KnessetHe indicated that he intends to present the draft budget tomorrow, Wednesday, with the first of three rounds of voting scheduled for December 8.
Last November, the government approved a spending package that includes tax increases and spending cuts aimed at covering the costs of the war Gazawhich entered its second year with no sign of ending.
The proposed budget included austerity measures worth 40 billion shekels ($11 billion), including an increase in value-added tax from 17 percent to 18 percent, aimed at reducing the fiscal deficit, which has reached 8.5 percent of gross domestic product.
The wars in Gaza and…Lebanon In increasing military spending by billions of shekels, with the deployment of thousands of soldiers on both fronts.
The economy has also experienced a noticeable slowdown due to labor shortages, with the construction sector particularly affected as a result of the suspension of work permits for Palestinian workers, which has brought 80 percent of projects to a halt.
Facing Israel pressure from Central bank And credit rating companies to quickly pass the austerity package, with the aim of suppressing the large budget deficit.
Major credit rating agencies have downgraded Israel’s ratings this year, amid fears that the war will continue into next year.
If the budget is not approved by the end of March, Israel will be forced to hold new elections, increasing pressure on the government to speed up the adoption of the budget.
Despite criticism for the delay, he defended it Smotrich He announced his decision, noting that the delay was necessary to present a more realistic budget that reflects current events.
It is important to note that the costs of the war in Gaza and Lebanon have exceeded 106 billion shekels ($28.4 billion) as of October 2023, exacerbating the financial deficit.
As he testified Israeli economy Declining growth and rising inflation, as the inflation rate rose to 3.5 percent, which negatively affected families.
These developments come at a time when Israel is facing major economic and security challenges, which require key decisions to maintain its financial and economic stability.
