Israeli Finance Minister Calls for Marathon Discussions to Draft 2025 Budget

Israeli Finance Minister Calls for Marathon Discussions to Draft 2025 Budget

Israeli Finance Minister Bezalel Smotrich has called for talks next week to draft the 2025 state budget. These discussions are described as “marathon discussions” and are aimed at moving the economy forward from a war that has put a strain on public finances. The Finance Minister stressed the importance of boosting growth during these talks.

In a letter to budget chief Yogev Gradus, Smotrich outlined that the budget discussions will take place on June 18-19. Typically, this process takes around two months to complete, but Smotrich emphasized the need for expedited discussions within two days. Bank of Israel Governor Amir Yaron is also scheduled to participate in these talks.

Smotrich highlighted the impact of the war on the economy and stressed the need for fiscal responsibility and transparency in policy formulation and decision-making. The Finance Minister acknowledged that the situation requires a comprehensive and clear understanding of the data in order to effectively address the challenges faced by the country.

Israel’s economy is projected to grow by around 2% this year, or zero per capita. Smotrich has faced criticism for allowing significant spending increases to finance the war against Palestinian Islamist group Hamas and Hezbollah in Lebanon. The annual budget deficit has reached 7.2% of GDP in May, exceeding the 6.6% target for the entire year of 2024.

In response to the increased spending on defense, Smotrich won a battle with Defence Minister Yoav Gallant to establish a committee to examine Israel’s defense budget. Central Bank Governor Yaron emphasized that the war should not result in a “blank check” being handed to the military during these discussions.

The upcoming budget talks are crucial for the economic recovery and growth of Israel post-war. The Finance Minister’s emphasis on fiscal responsibility, transparency, and efficient decision-making will play a significant role in shaping the country’s financial future. The participation of key stakeholders, including the Bank of Israel Governor, reflects the importance of these discussions in guiding Israel’s economic policies for the coming years.

Economy

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