Israeli Cabinet approves spending cuts in budget

The Israeli Cabinet approved deep spending cuts in a $26.4 billion austerity budget, two thirds of which is swallowed up by defense and the national debt.

Israeli Finance Minister Yoram Aridor had warned that without the cuts, inflation could double from the present 127 percent.

The Finance Ministry said the budget deficit was expected to be around 2.4 billion dollars. The budget will be sent to the Knesset probably next Sunday, the Finance Ministry said.

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