Fears that "the wheel of production," Israel due to the accumulation of debt

By : mina sabry

On : 4:27:00 PM

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Said Central Bank Governor, Professor Stanley Fischer, Israel to the accumulated deficit in the budget as a result large debt on the Israeli government would hurt significantly in the process of economic growth and the wheel of production and in the Israeli political capacity to cope with the financial economic crisis.

Fischer explained during a lecture he delivered at a conference of the International Monetary Fund being held in Washington, to try to address this deficit by reducing the miscellaneous expenses will be harmful to the growth of the economy that is less than the tax rate increase to the public, which will result in high prices of living.

Fisher pointed out that what was done by Israel in 2003 to address this problem by reducing the contract popular in Israel, which caused the increase in fiscal deficit, but the government did not feel any difficulty in financing the facility during the financial crisis in 2008.

Turning the Governor of the Bank of Israel to the subject of expansion and increase the financial contracts during the desired period of financial crises and risks that surround it, such as increasing interest rates on government contracts, which will lead naturally to increased inflation.

The newspaper "Haaretz" Israeli Fisher said that the answer on the issue of fiscal deficit in the volume of outstanding financial contracts and percentage, in addition to the size of confidence within the government.