JERUSALEM (Reuters) - Israel’s cabinet on Sunday approved spending cuts worth 22 billion shekels ($5.9 billion) over 17 years to help finance a steep salary increase for policemen and prison guards as well as supplements to pensioners.
Starting in 2019, spending will be reduced by 1.35 percent with an additional 0.2 percent cut between 2020 and 2035, the Finance Ministry said.
Israel’s 2019 state budget has already been approved.
October data showed the deficit over the past 12 months jumping to 3.6 percent of gross domestic product from 3.35 percent in September and 2.5 percent in August, as spending has grown and tax income has slipped.
Israel has a budget deficit target of 2.9 percent this year and in 2019. As Israel approaches an election year, the central bank and analysts have become increasingly worried that the budget deficit is too high and gives the government no room to deal with a potential economic slowdown.
Reporting by Steven Scheer; Editing by Emelia Sithole-Matarise