JERUSALEM – Israel’s government approved the 2023-2024 budget on Friday against the backdrop of economic uncertainty linked to controversial judicial reforms advanced by the government of Prime Minister Benjamin Netanyahu.
“We want to show that the tradition we have created here in the state of Israel, of a free economy with fiscal and monetary responsibility… and independence for the Bank (of Israel), are valid for us always, especially at this time,” Netanyahu said in a statement issued by his office.
The government had been expected to adopt the budget during a cabinet meeting Thursday, but talks ran late into the night and also took place on Friday morning.
Parliament must still vote to adopt the fiscal measures.
Netanyahu’s coalition government — regarded as one of the most right-wing in Israel’s history — pushed on in parliament this week with its controversial judicial reforms, which it says are designed to limit overreach.
Protesters who have taken to the streets in their tens of thousands decry the changes as harming democracy by weakening checks and balances.
Netanyahu’s remarks Friday appeared to seek to allay concern over the potential economic impact of the judicial changes, which include limiting the powers of the supreme court.
The Israeli currency sank to a three-year low of around 3.68 shekels against the dollar this week, with analysts blaming uncertainty over the impact of the reforms and some leading economists warning the changes could lead to a decrease in investment.
Israeli media reports said that during budget discussions on Thursday, central bank chief Amir Yaron warned ministers about the risks of an economic crisis linked to the new judicial measures.
Netanyahu said Friday that the budget came “against the backdrop of the best macroeconomic data that I can remember in all my years on the job”.
“The Israeli economy is strong and steadfast,” he said in Friday’s statement.