Israeli Prime Minister Benjamin Netanyahu. (Credit: AFP)
JERUSALEM — Israeli authorities will freeze property taxes for a year and cancel or cut back recent hikes in the costs of electricity, water and fuel, Prime Minister Benjamin Netanyahu said on Wednesday, unveiling preliminary measures to ease inflation.
Finance Minister Bezalel Smotrich, speaking alongside Netanyahu at a televised news conference, said the government would maintain fiscal responsibility while pursuing the plan.
"Our economy has entered an inflationary spiral," said Netanyahu, who began his sixth term as premier last month astride a religious-nationalist coalition government.
"We must turn the wheel around now. We cannot wait until the budget discussions."
Among the measures he announced was cutting by 70 percent the 2023 increases in the prices of electricity and water. But neither he nor Smotrich said where the supplementary funds would come from.
Israel's annual inflation reached 5.3 percent in November, for its highest since Oct. 2008, and the Bank of Israel projects the rate will dip to three percent by the end of 2023. Israel has an official annual target of one percent to three percent.
Israel posted a budget surplus of 9.8 billion shekels ($2.8 billion) in 2022, or 0.6 percent of gross domestic product, its first annual surplus in decades, the Finance Ministry said. This followed deficits of 4.4 percent of GDP in 2021 and 11.3 percent in 2020. Its 2022 deficit target was 3.9 percent of GDP.