Bank of Israel Governor Amir Yaron makes a final plea to Prime Minister Benjamin Netanyahu to maintain fiscal discipline ahead of a cabinet vote on a revised 2024 budget to incorporate enormous funding increases for the war with Hamas.
Yaron has for weeks been urging the government not to spend excessively and offset any spending increases needed for the war with reductions elsewhere, along with tax hikes – items that government leaders have dismissed.
“There is no free lunch,” Yaron writes in a letter to Netanyahu that was seen by Reuters, stressing that markets are watching fiscal policymakers.
Yaron says the letter encompasses what he told Netanyahu at a meeting between the two last week.
He estimates the Gaza war will cost NIS 210 billion ($56 billion) for defense and compensation, excluding loss of income for residents near the Gaza and Lebanese borders who have been displaced by months of cross-border rocket fire.
Israel last year approved a two-year budget for 2023 and 2024, but the war against Hamas in Gaza has shaken government finances, requiring budget changes and additional spending.
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From the Liveblog of
Wednesday, January 10, 2024
