"There is little new in the economic plan (except for an increase in the guarantees for the banks). It reiterates the things that Netanyahu said at every economic meeting before the elections," says IBI Investment House chief economist Ayelet Nir in response to the economic plan presented by Prime Minister Benjamin Netanyahu and Minister of Finance Yuval Steinitz today.
Nir adds, "What is missing in the plan presented today is the sources, as well as the fiscal targets. In other words, how much will we pay in terms of debt-to-GDP ratio in the coming years, and whether there are operative targets for these variables."
Nir noted a number of positive points in the plan. One point is that Netanyahu and Steinitz lifted the uncertainty about the tax cuts plan. Until recently, it was not clear if it could be implemented.
Secondly, "We're no longer talking about comments by a candidate for prime minister, but the plan of the prime minister and the finance minister. In other words, they will have find the sources to finance this plan from the budget."
Nir concluded, "We support the plan, which includes worthy goals, on the assumption that fiscal responsibility is kept, in other words, so long as there is no extraordinary increase in the budget deficit in the coming years, given that we've already paid for some increase."
Prof. Dan Galai of Hebrew University in Jerusalem said, "Netanyahu's economic plan is essentially a psychological plan intended to calm the economy. Some parts of the plan had already been stated, and are unrelated to the current crisis. The plan includes many positive things, but it is not clear how it will be implemented." Galai is one of Israel's leading economists and a world-renown expert in banking and risk management.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2009
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