Raised Eyebrows Over NIS 15 Billion Budget Hole

Moody’s rating agency company headquarters in New York. (EMMANUEL DUNAND/AFP/GettyImages)
Moody’s rating agency company headquarters in New York. (EMMANUEL DUNAND/AFP/GettyImages)

Knesset Finance Committee Chairman Nissan Slomiansky has a simple question on the state budget for Finance Minister Yair Lapid: Where’s the money to pay for all this?

On Wednesday, told Army Radio that the proposed budget for 2015 left 15 billion shekels unaccounted for.

“The gap between the expenditures and the revenues is very large and I’m not sure gathering shekels [from cutting smaller budgets] will cover it,” he said in an interview.

Increasing the deficit to 3.4% of GDP means that extra borrowing would pay for NIS 10B in spending. The overall hole, however, was closer to NIS 25B, meaning NIS 15B in expenditures still lacked coverage, according to Slomiansky’s calculations.

Meanwhile, the international credit rating agency, Moody’s, published its evaluation of the Israeli economy on Wednesday, saying that Israel had retained its A1 stable outlook.

The report also states that Israel’s growth is likely to pick up next year and that the current account surplus has shrunk during the past two years.

The report warned that “Israel’s extensive geopolitical challenges continue to constrain the ratings.”

“A substantial further reduction in the government’s debt levels would improve Israel’s creditworthiness,” the report said. “Conversely, the rating outlook could be lowered to negative if the commitment to fiscal discipline, in particular the consensus around fiscal consolidation, were to wane.”

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