Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich met late Sunday night to discuss Israel’s 2025 budget, the Prime Minister’s Office said.
At the meeting, the two discussed the budget’s framework and different alternatives for its structure with the goal of supporting the war efforts, both on the frontlines and the home front, as well as advancing the economy, the PMO added. The two agreed that the budget be approved by the end of 2024.
The meeting comes amid criticism of the apparent lack of progress on creating the 2025 budget, which economists say has contributed to a lack of certainty and confidence in the country’s economy.
It also comes after speculation in July from Yisrael Beytenu head MK Avigdor Liberman who said that the prime minister does not plan on passing a budget because he intends to dissolve the government in November, Maariv reported last month.
The yearly schedule for building the budget for the following year generally includes preparation work until June, government discussions in July and August, budget legislation preparation in September and October, and voting in the Knesset and Knesset committees in November and December, according to the Knesset.
Drop in credit rating
This means that at this stage, Israelis would generally expect to see government meetings on the budget wrapping up as the budget begins to be set in bills. So far, it appears that these preparations have not been advancing.
This creates a lack of confidence and the appearance of a lack of stability for Israel’s economy which, among other things, contributed to the drop in Israel’s credit rating by ratings giant Fitch, last week, according to Dr. David Lagziel, a senior lecturer at Ben-Gurion University of the Negev.
Lack of progress on the budget also means that necessary economic responses to the fallout of the Israel-Hamas war are not being decided on, further contributing to a lack of confidence in Israel’s economy.