Stanley Fischer
Stanley FischerIsrael News photo: Flash 90

Bank of Israel head Stanley Fischer has expressed support for Finance Minister Yair Lapid’s budget for the next year. Lapid presented his budget Monday to Prime Minister Binyamin Netanyahu.

Fischer had strongly opposed a previous proposal to increase the deficit.

However, following the meeting he praised Lapid’s plan to increase the deficit by a maximum of 3% through 2014. "I commend this bold decision, which is essential for the stability and prosperity of the Israeli economy,” he said.

“I believe that the difficult decision [Lapid] made… will bring back the trust that was a key ingredient in fiscal policy and in the Israeli market’s ability to stand in the face of the economic crisis,” he continued.

“It’s clear that implementing this decision will mean painful steps,” he added. “But we must realize that this decision is essential for safeguarding the economy against a downward fall, and for future market stability.”

Lapid plans to keep government spending on target by cutting child payments and halting a planned expansion of the railway system, among other things.