The Governor of the Bank of Israel, Amir Yaron, welcomes the approval of the state budget

The Governor of the Bank of Israel, Amir Yaron, welcomes the approval of the state budget in the government and says, "It is good that a budget has finally been approved by the government and a package of economic measures that can advance the economy," Professor Amir Yaron welcomed the 2021-2022 government budget.
In his state way, Yaron Kurtz to previous governments that have changed here in the last three years and have failed to pass a budget, which has hurt the economy, and especially the citizens of the country. Yaron later referred specifically to and welcomed some of the measures and reforms formulated by the Treasury.
At the same time, although he has spoken freely about his support for raising the retirement age for women, promoting the metro and encouraging local government to take renewal measures in the housing sector, there is one key issue he has refrained from addressing: agriculture reform.
Is it because the governor does not support the move, estimates that it will not pass - or because of the late hour he forgot to mention it? time will tell.
In any case, the Bank of Israel supports the Treasury's measures to return the economy to its pre-Corona position as early as next year and defines the proposed deficit target for 2022 of 3.9% of GDP as "appropriate for the current macroeconomic environment."
According to Yaron, "Since, according to estimates by the Bank of Israel and the Ministry of Finance, the economy is expected to return at the end of 2022 to the GDP route environment that was expected before the crisis, it should also converge to the level of the structural deficit before the crisis."
However, the Bank of Israel believes that by 2023 the government will have to raise taxes and reduce its spending. This is in order to reduce the structural deficit as well as enable the financing of huge investments in the infrastructure planned in the Arrangements Law.
"Including the required investments in the economy that the economic plan drives, there is a low budget cost at the current stage - which is the launch and planning stage - but their implementation will require a significant budget expenditure in the future.
It is important for the government to prepare for these expenditures by reducing the structural deficit in budgets following its current level, adopting an expenditure ceiling that will allow them to be implemented, and adopting measures to increase revenues and reduce other expenditures in the coming years.
Detailed analyzes presented by the Bank of Israel show that even when it comes to quality and well-characterized investments, most will have to be financed through measures to increase government revenues or reduce spending, to prevent a dangerous increase in debt-to-GDP ratio, and only a small amount. To 2022, "the governor said.
The governor further warns that "it is important to refrain from creating budget commitments for the coming years that will increase the permanent expenditures that are not part of the growth-supporting investments."