The Knesset (parliament) approved the 2019 state budget on March 15, over nine months early. The 480-billion-shekel (138-billion-dollar) spending package is mildly expansionary at a time when the economy is near capacity -- and locks in fiscal policy far in advance. However, Prime Minister Binyamin Netanyahu was determined to pass the budget now to avoid rifts that could bring down the government before scheduled elections in November 2019.
Approval of the 2019 budget should help the Netanyahu government achieve short-term coalition stability.
Major expenditure hikes on education, health and transport will reverse years of underspending.
Replacement of Governor Karnit Flug after mild criticism of the government could damage the Bank of Israel’s perceived independence.
