PNN – Toms Levi-Bona, Deputy Head of the Budget Department at the Israeli Ministry of Finance, stated: Israel has entered a difficult economic phase and will be forced to make painful decisions, as talk of an “economy shock” has become a reality.
According to the report of Pakistan News Network, citing Al-Mayadeen, Bona said: After enjoying solid foundations, the Israeli economy has undergone significant change over the past three years.
He said at the Aharon Institute Economic Policy Conference at Reichman University: We have maintained an average annual growth rate of 2.6 percent for three years, and our credit rating has been downgraded. After a decade of hard work to reduce the debt-to-GDP ratio by half a percentage point, we have continued to increase it by 2.5 percent annually for the past three years. If we have collected 447 billion shekels over a decade, we have collected a similar amount in the past three years alone.
The Israeli official warned: In the past, we had an economy that lowered interest rates on its debt, increased civilian spending, and maintained security spending—everything has been turned upside down. This presents us with a three-pronged dilemma that challenges policymakers: we have to choose between debt, living standards, and security.
Advising against abandoning national debt reduction, he added: The debt resulting from the war amounts to 358 billion shekels.
“We have lost our financial safety net”
Bona said: This means we have lost our financial safety net. Let me remind you that we knew how to go from 60% of debt to 70% of GDP overnight. It was a safety margin and we used it – war needs money and the economy knows how to provide it thanks to the trust it has built up over 20 years and the markets have given us.
He asked: But if we continue like this, who will guarantee the next jump that we may need due to the emergency, between 70% and 80%? Perhaps then we will really have to face severe fluctuations, perhaps even a deadlock. An economy that needs to meet the demands of war and finds itself in such a situation – this means losing on the front lines.