Mizrahi-Tefahot CEO: "The 2025 budget must be professional, not driven by sectoral demands"
Mizrahi-Tefahot CEO: "The 2025 budget must be professional, not driven by sectoral demands"
Moshe Larry was speaking at Calcalist's 2024 real estate economy conference held in collaboration with Mizrahi-Tefahot. "The budget must be crafted with long-term planning. If not, we could face economically lost years."
"We are in the midst of a difficult and prolonged war, the most challenging in our history. Eleven months have passed since October 7th, and we have suffered hundreds of deaths, thousands wounded both physically and mentally, and tens of thousands displaced. Alongside the achievements of our brave soldiers, the IDF, and the security forces, we are burdened with deep sorrow. This is a continuous mourning, one that never seems to end. This is the pain of the injured," said Moshe Larry, CEO of Mizrahi-Tefahot Bank, as he opened Calcalist's 2024 real estate economics conference, held in collaboration with Mizrahi-Tefahot.
According to Larry, "There is an unimaginable and unforgivable uncertainty facing the families of our abductees. Yet we hold on to hope and faith that we will emerge from this situation stronger and more united. At this point, we ask ourselves: what does our hope rest on? The answer is resilience, extraordinary resilience, found in our younger generation, our sons and daughters—a generation of heroes. To be worthy of them, our leadership must face reality as it is and make the right decisions, even if they are difficult."
Regarding the state budget, Larry noted: "We are on the brink of a crucial decision regarding the 2025 state budget. I sincerely hope the Knesset will approve it, as the current economic reality is both challenging and complex. This is a historic and critical budget in its importance. I have said before that Israel stands at an economic crossroads. The fact that we have navigated crises in the past does not guarantee success in the future. To succeed, we must take significant steps in both the economic and social spheres."
Larry added, "Concerning the 2025 budget, the alarm bells are ringing loudly—rating agencies, Treasury professional, the governor, and the business community all emphasize that the budget must be crafted with long-term planning. If not, we could face economically lost years. It’s crucial to understand that the economy is not a game. Our younger generation, our heroes, deserve better."
He continued, "As we prepare the budget, we must remind ourselves of key economic principles that should guide its creation. Economics should not be political—that is a simple truth. The budget must be professional, not driven by sectoral demands. It should be egalitarian. The debt ceiling should not exceed four percent, and it’s encouraging that the Ministry of Finance seems to be moving in this direction. The debt-to-GDP ratio must decrease over time, and I hope it will not surpass seventy percent in 2024. The budget should address our security needs, as war has economic consequences. The defense budget must be significantly increased to cover both security and the rehabilitation of the wounded. Additionally, cuts will be required across all sections, even those that seem minor. Visibility and transparency matter. To achieve our goals, we must increase revenue, and this will require new tax measures. Here, the principle of shared responsibility is crucial."
Larry concluded: "An economic crisis also presents an opportunity. We must invest in infrastructure, support the high-tech sector, and make meaningful investments in education. The budget should be a positive development for our younger generation—the generation of heroes. We need to assist them in purchasing homes. The real estate industry is vital to the economy, constituting about 15% of the GDP, and 20% of state revenues come from this sector. However, the industry lacks comprehensive, long-term care. It’s time for the government, authorities, and the real estate sector to collaborate on a long-term action plan to benefit the younger generation. Complex issues must be addressed, such as shortening the permit process, addressing the shortage of professionals, issuing building permits, promoting urban renewal, and providing rental housing. Moreover, the plan should address not only supply issues but also buyer needs—particularly for young couples. Our bank’s survey found that real estate is a significant part of daily discourse in Israeli homes. It is deeply embedded in the Israeli psyche. The conversation about buying a home is a major issue, and this requires offering young couples mortgage options extending beyond 30 years. In this current period, that is the order of the day."
