Israel’s Budget Deficit May Reach 13% of GDP This Year: Hapoalim

Israel’s budget deficit will reach 180 billion shekels this year, as tax revenue falls while the government continues to spend on fiscal stimulus, according to a note from economists at Bank Hapoalim.

• 2021 budget will need to include a tax hike and spending cuts in large amounts
• At current rate of government bonds purchases, the Bank of Israel will conclude its 50 billion-shekel crisis commitment around October
• In Bank Hapoalim’s assessment, the central bank will expand the QE program beyond 50 billion shekels in order to keep yields from rising
• Shekel strengthened against dollar over last month largely due to ...