BICOM

Following an announcement that Israel’s deficit stood at almost double the predicted figure at the end of 2012, Prime Minister Benjamin Netanyahu defended the country’s economic outlook while his opponents sharply criticised his economic management and warned of expected austerity measures.

Figures released by Israel’s Finance Ministry on Sunday showed that the budget deficit rose to 4.2 per cent of gross domestic product, which is double the original estimate and translates as a gap in the budget of around £6.5 billion. However, Netanyahu played down the figures, commenting “We expected a deficit of 3.9% of GDP, and a difference is 0.3 percentage points. I don’t think this will have a significant impact on the country’s people.” In an interview on Channel Two news last night, Netanyahu indicated that the deficit would not necessarily necessitate a rise in taxes, saying “Maybe the gas revenues will be larger than we think? Maybe international markets will recover and exports will increase?”

Nonetheless, just a week before the election, Labour Party leader Shelly Yachimovich, who has campaigned almost exclusively on an economic and social agenda, said “The deviation from the deficit is a glaring testimony to Netanyahu’s failure in steering the Israeli economy.” Her party released a statement claiming that each Israeli family will foot an annual bill of around £3,000 to bridge the deficit.

Leader of Hatnuah, Tzipi Livni also criticised Netanyahu, saying that he “insists on running the economy according to old and outmoded rules that have failed around the world,” and accused him of unjustly taxing the middle classes. Striking a similar note, Yesh Atid leader Yair Lapid said that Netanyahu’s economic policies “are collapsing before our eyes” and said that instead of increasing taxation for the middle classes, his party would first “cut spending on the ultra-Orthodox and settlements, and on the wasteful government.”