Bank of Israel chief reportedly warns economic crisis ‘could break out within a moment’

During a hearing today on the next state budget, Bank of Israel Governor Amir Yaron warned that an economic crisis “could break out within a moment,” according to Hebrew media reports.

The reported remark came amid growing warnings over potential economic fallout from the government’s efforts to overhaul the judicial system, and days after the central bank hiked its key lending rate to the highest level since 2008, as it seeks to battle inflation and a weakening shekel.

The meeting came after the Finance Ministry’s chief economist sent the government a report earlier in the day, warning the judicial plans are poised to crimp economic growth and foreign investment in Israel.

Finance Minister Bezalel Smotrich, whose far-right Religious Zionism party is one of the driving forces behind the shakeup of the judiciary, reportedly also warned of “a scenario that develops in negative directions,” with a drop in government revenues.

“Therefore we need to be responsible with the budget,” he was quoted as saying.