Israel Aims for 2012 Budget Gap of About 3.9%, Steinitz Says

Israel aims to lower its budget deficit to about 3.8 percent or 3.9 percent of economic output by the end of this year, Finance Minister Yuval Steinitz said.

“This is what we are working toward,” Steinitz said at a meeting of the Knesset Finance Committee near Tel Aviv today. “I can’t promise at this point.”

The deficit was 4.1 percent in the 12 months through August, more than double the original target as revenue lagged behind forecasts, the Finance Ministry reported yesterday.

Israel’s parliament last month approved an increase in value-added tax from Sept. 1 to help narrow the gap. It also approved higher income taxes beginning in 2013 to help meet next year’s revised deficit target of 3 percent.

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