Jerusalem, 10 August 1999
Pm Barak Sets Budget Goals
(Communicated by Prime Minister’s Media Advisor)
Prime Minister Ehud Barak today (Tuesday) 10.8.99, determined the government’s economic policy goals as the achievement of sustainable growth and ending the current deep and lengthy recession. Barak noted the difficult economic situation, i.e. a budget deficit that has breached its target, a high debt/GDP ratio, high unemployment, and a rate of growth so low that GDP/per capita will decline for a second year in a row.
The two following targets were decided upon:
1. The deficit target for 2000 will be 2.5% of GDP, down from the 1999 target deficit of 3-3.25%. It was also decided that the deficit target will be gradually decreased to no more than 1.5% of GDP by 2003.
In parallel, the state budget will emphasize investment in infrastructure and implementing necessary structural reforms. The object is to reduce the public sector share in the economy, aid the expansion of the private sector, create jobs and return to the path of sustainable growth.
2. The inflation target for 2000-2001 will be between 3- 4%.
The Prime Minister said that he attaches great importance on coordination between the two economic policy arms. Achieving the government’s objectives will be made possible by the cooperation between the Bank of Israel and the Finance Ministry who will coordinate responsible fiscal and balanced monetary policies, as well as implementing structural changes in the economy.