Smotrich asks Treasury to prettify economic review

Minister of Finance Bezalel Smotrich asked officials at his ministry to prettify a report on macro-economic trends in Israel. The report was submitted yesterday to the Knesset Finance Committee. After it was prepared, Smotrich complained that it did not portray Israel’s economic situation in a more positive light.

Smotrich requested of acting chief economist Shmuel Abramson that he should change some of the wording in the report. As far as is known, Abramson refused to do so. He was appointed by Smotrich on a provisional basis, after the departure of former chief economist Shira Greenberg. Greenberg ended her term three months ago in stormy fashion, after she warned at every opportunity about the consequences of the government’s judicial overhaul, of which Smotrich is a leading supporter.

After Abramson refused to accede to his request, Smotrich appended his own preface to the report, giving his interpretation of the figures. “The Israeli economy’s macro data are good and strong,” he wrote, and heaped compliments and praise on the government’s management of the economy. He also sharply criticized the protest against the judicial overhaul. “Mighty forces with huge budgets and unprecedented media backing are slandering Israel around the world with blatant lies and empty fearmongering. It would appear that up to now their impact on the economy has been minimal,” he wrote.

Smotrich even asked Ministry of Finance officials to omit from the report a paragraph on risks. The paragraph, which in the end was included in the review, states, “Several economic developments, both global and local, which have taken place since the approval of the state budget are having a deleterious effect on the fiscal conditions in which the government works, and it is possible that this trend, alongside additional risks, will continue to affect the fiscal environment in 2024 as well.” This is a fairly vague warning, which does not explicitly mention the judicial overhaul, but the dispute over it provides a glimpse into the tensions between Ministry of Finance professionals and the minister.

Smotrich himself admits in his prefatory remarks that inflation “is worse than we expected when the budget was presented,” and mentions the weakness of the shekel, which in the past few days has reached NIS 3.81 against the US dollar, versus an assumption of a NIS 3.60/$ exchange rate in the budget.

Published by Globes, Israel business news – en.globes.co.il – on September 5, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.