The Finance Ministry has updated its forecasts for 2019, and is warning of slower growth than expected, with the economy expected to grow by 3.1 percent instead of the previously projected 3.4%.
Slower growth will mean less tax revenue. Alongside greater expenditure than expected, the 2019 budget deficit is expected to stand at 3.5% of GDP, instead of the 2.9% goal.
The changes in projections are expected to create a budget gap amounting to around NIS 10 billion ($2.7 billion).
Finance Minister Moshe Kahlon is reportedly refusing to consider raising taxes or cutting spending to help close that gap, with media assessments that the Kulanu party leader is loath to make such politically unpopular moves four months before a national election.
Whoever leads the Finance Ministry after April’s vote will need to decide how best to deal with the budget deficit.
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