Bank of Israel Governor Stanley Fischer sees moderate increase in deficit as acceptable.
In the Bank of Israel's Inflation Report for the third quarter of 2008, Bank of Israel Governor Stanley Fischer accepted that a short term increase in the deficit is okay. He said that such steps should not result in an excessive increase of the government deficit or government debt. Fischer observed that a short-term moderate increase in the deficit is not likely to undermine economic stability or confidence.
Fischer noted that Israel is unlike many other countries in that its general financial system, and in particular the banking system, are well placed to meet the global crisis. He expected inflation, which reached 2% during July-September 2008 and 5.5% in the 12 months ending September 2008, to moderate gradually and return to within range by the middle of 2009.