Israel’s Yaron Says Delay in Budget Steps May Hurt Economy

(Bloomberg) -- Bank of Israel Governor Amir Yaron warned that prolonged political deadlock could hurt the economy by delaying action to cut the budget deficit and boost productivity.

Yaron spoke after Finance Minister Moshe Kahlon announced that the 2020 budget wouldn’t be in place at the beginning of the year.

“The Israeli economy is growing at a good pace and until now, the financial markets haven’t been significantly affected, but that doesn’t mean there is no harm done,” Yaron said. The 2019 budget is on track to reach 3.8% of gross domestic product, above the 2.9% target.

A repeat election on Sept. 17 produced another inconclusive outcome, and a week later it isn’t even clear who will be tapped to try to form the next government. The country has been in a state of policy paralysis since December, when Prime Minister Benjamin Netanyahu acted to dissolve parliament and call the first of two elections this year.

Political Woes Delay Israeli Budget Planning Past Start of 2020

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