In an interview on Channel Two Sunday night, Finance Minister Yuval Steinitz said that he did not expect to have to raise taxes on Israelis in the coming year – despite the fact that the budget deficit for 2012 was twice what is was supposed to be.
Earlier Sunday, the Accountant General's Office released figures that showed that Israel's budget deficit was double than what had been expected. Instead of the 2% that Israel had been thought to be in “overdraft,” it turns out that the deficit is 4.2%.
According to reports, the figures were an unpleasant surprise for Steinitz and Prime Minister Binyamin Netanyahu. But in the interview, Steinitz said that he was personally not surprised. “We knew that the deficit would be about 4%,” he said. That deficit had already been factored into the budget. “We already adjusted tax rates in July 2012, and as a result we see no need to raise taxes at this point.”
And despite the deficit, Israel's economy was still one of the strongest in the world, relative to its size. “Israel is the only country that has reduced its national debt. You have to look at the full picture. The average citizen understands that there is a serious economic crisis in Europe, and s/he wants to be protected from this. In general, Israel was in first place in economic growth, job creation, and debt reduction in 2012,” Steinitz said.
“Israelis who are looking at the crisis realize that despite the challenges, the economic leadership of this country has created a situation where it is first in many parameters. They understand the need for a responsible economic leadership,” Steinitz added.