Cabinet budget vote postponed to Wed; Klein: Budget amendments - bare minimum

Shekel bonds are posting sharp rises on expectations of an interest rate cut
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In a budget meeting held by the government this morning, Prime Minister Ariel Sharon and Finance Minister Silvan Shalom presented the cabinet with the new budget goals: a 2% growth rate, a 3% deficit goal and an NIS 6.15 billion cut in government expenses.

Labor party secretary Ra'anan Cohen asked to postpone the vote on the budget decisions to the next cabinet meeting next Wednesday, when the treasury will suggest ministers the alternatives for government budgeting cuts.

In spite of the fact the meeting was calm, some ministers, particularly Labor ministers, continuously criticized the finance minister and his office.

"The amendment offered to the budget of 2002 is the bare minimum, in light of the worsened global market conditions, the 2001 deficit exceeding its goal, and the increased deficit goal for 2002," said Governor of the Bank of Israel, David Klein, when referring to the amended budget submitted to the government by the Treasury.

Recent market estimates have been the Governor will cut the interest rate by 0.3%, some say even by as much as 0.4%, next Monday. These estimates are reflected in the trade in shekel bonds, currently rising steeply on large turnovers.