Bank of Israel chief criticizes Netanyahu's budget plan

Bank of Israel Governor Amir Yaron has criticized the recently approved budget for 2025, stating it will not sufficiently reduce Israel's debt-to-GDP ratio, which has been adversely affected by an 18-month-long war. Although the budget includes significant tax increases intended to address rising defense costs, Yaron argues that these measures are temporary and insufficient to guarantee a sustained decline in debt levels. He emphasized that the government missed an opportunity to enhance economic growth and productivity through more effective fiscal policies. The Bank of Israel's annual report highlighted the need for careful spending adjustments, particularly in areas that support long-term growth, such as education and infrastructure. Yaron's comments reflect broader concerns about the resilience of Israel's economy in the face of ongoing military expenditures and the challenges posed by the current fiscal framework. He also warned against any tax reductions in future budgets until the fiscal situation stabilizes.