September 17, 2018 / 12:14 PM / 8 months ago

Social security plan to end govt transfers may boost Israel budget deficit - finance ministry

JERUSALEM, Sept 17 (Reuters) - A plan by Israel’s social security agency to end annual surplus payments to the government starting in 2019 will likely lead to a budget deficit jump of 1.7 percentage points, a finance ministry source said on Monday.

That would put the deficit next year close to 5 percent, possibly hurting the country’s credit rating and forcing the closure of some social services, the source said.

The National Insurance Institute (NII) has been transferring the surplus that can reach up to 25 billion shekels ($7 billion)a year to the Finance Ministry since 1980. But with deficits projected to start in four years and bankruptcy foreseen in 2037, the agency feels it needs to hold on to the funds and invest them itself, its chief executive said.

$1 = 3.5863 shekels Reporting by Steven Scheer Editing by Richard Balmforth

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