Members of the Knesset's Finance Committee today clammed the finance minister and his director-general, who participated in a budget today. They said that under the circumstances, the treasury's forecast of 4% GDP growth in 2002 is unrealistic.
The 4% target is unattainable due to world developments following the September 11 attacks on the U.S. and the worsening security situation in Israel, the MKs said.
Actual growth next year will be far lower, they said, undermining treasury forecasts of tax revenue and deficit.
Former Finance Minister Avraham Shochat said that Israel cannot control the forces at play, but the government can take steps to relieve the crisis.
Shochat called on the government to immediately nullify a set of partisan laws recently enacted that will cost the taxpayer billions. Meanwhile, he said, the government should ban the import of foreign laborers in order to improve the unemployment situation.
Finance Minister Silvan Shalom rebutted that the Finance Ministry does not change its forecasts at the drop of a hat. He suggested waiting until the results of the first or second quarter of 2002 are in before re-examining the 4% growth target for 2002.
Shalom agreed that the recent events in the U.S. and the escalation at home will make it harder for the economy to achieve the set targets. But the government doing what it can, he said, and is routing major budgets to growth-encouraging investments, such as investment in physical and human infrastructure.