Macroeconomic Forecast Israel

We expect Israel's fiscal deficit to comfortably exceed the government's stated 2012 target of 2.0% of GDP, despite growing political pressure to narrow the shortfall. With the economy slowing and parliamentary elections looming in 2013, the administration is unlikely to risk implementing any significant fiscal consolidation measures in the near term, and we forecast the budget shortfall coming in at 3.5% of GDP.

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