Finance Minister warns of economic slowdown

Minister Bar-On emphasized the importance of continuing to reduce the public-debt-to-GDP ratio from the current 80% to 58% by 2015
 
At a meeting held last Tuesday at the Federation of Israeli Chambers of Commerce to discuss the 2009 budget draft with local businessmen, Finance Minister Ronnie Bar-On said that "The aim of the budget is not only to protect political survival but to create growth by closing social gaps”.
 
He warned of a fall-off in the growth rate of the economy as a result of the global economic slowdown and reiterated the importance of keeping to budget discipline and passing the draft of the 2009 budget in spite of the unstable political situation.
 
Bar-On added that "The combination of a slowdown of the economy and political instability is a recipe for disaster. Therefore, it is of the utmost importance in such a situation to passthe 2009 budget and to show fiscal responsibility and maintain stability in the economy,".
 
Furthermore, Bar-On emphasized the importance of continuing to reduce the public-debt-to-GDP ratio from the current 80% to 58% by 2015. "In recent years we have been able to trim the public-debt-to-GDP ratio, but it is still high in comparison with the average of 58% in OECD countries," said Bar-On. "Bringing the debt-to-GDP ratio to OECD levels will enable us to cut interest rate costs, improve Israel's credit rating and increase our flexibility to deal with local turbulence." In 2003, for example, Israel's public-debt-to-GDP ratio was over 100%, said Bar-On, adding that if this situation had continued, Israel would have not been able to contain the costs of the second war in the Lebanon.