In the absence of approval from the Knesset for the new state budget for the year 2024, the spending limit, which was previously approved in 2021, has come into effect. This approval was part of a package of measures that were designed to stabilize the economy during the tumultuous times of the pandemic. It was decided within this framework of the older version of the state budget.
As per the rule established then, the state budget deficit for the year 2024 was not supposed to exceed 2.4%. Now, with the new official forecast predicting a deficit of 6.6%, it becomes obligatory for the government to reduce the spending gap until the new state budget gets the necessary approval.
The restriction on spending should be lifted as soon as the new version of the state budget is approved. However, until such time, any government contract that is worth more than NIS 20 million will need to be vetted and approved by the auditor general. This measure is intended to ensure that government spending is kept under stringent control until the new budget plan is put into effect.
