Gov't deficit has already exceeded annual 2001 target by NIS 5 billion

Deficit for November came to NIS 1.8 billion
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The government deficit in November came to NIS 1.76 billion, lifting the total deficit for 2001 to NIS 13.5 billion. The figures exclude net credit.

The yearly total so far exceeds the government target of NIS 8.4 billion for the whole year, by NIS 5.1 billion.

In November the government's deficit on domestic activity, excluding net credit, was NIS 990 million, rising to NIS 1.1 billion when including net credit.

Government activity abroad resulted in an NIS 770 million deficit for November.

During November the government raised NIS 1.8 billion abroad and NIS 3.7 billion at home, in net figures.

The government deficit target for 2001 is 1.75% of GDP, rising to 2.4% of GDP in 2002. Neither target is feasible: Even the treasury admitted as much yesterday.

Although treasury director-general Ohad Marani avoided mentioning figures, he did say that the government would not allow the deficit to reach dangerous proportions. That would seem to indicate expectations of a 3% to 3.5% deficit next year.

Bank of Israel officials clarified yesterday that unless the government lowers its 2002 growth forecast to 1.9%, instead of the current 4%, and takes an ax to the budget, the deficit will climb beyond 3.5% next year ¿ which would bring it to 6% of GDP using international accounting standards.

The inevitable result would be a downgrade of Israel's sovereign credit rating.