The Jewish state’s fiscal deficit expanded to 0.3% of the country’s gross domestic product in April, corresponding to $1.35 billion, according to statistics published on Monday by Israel’s Ministry of Finance.

This negative economic development is linked to the continued decrease in state revenue from taxes, mostly due to a slowdown in the normally-lucrative Israeli housing sector.

In addition, Israel’s government expenses are increasing. The current Netanyahu-led government recently earmarked nearly $1.4 billion for the ultra-Orthodox population segment, allegedly to appease ultra-Orthodox parties in the government coalition and to ultimately get the 2023-2024 state budget passed.

Israeli Finance Minister Bezalel Smotrich blasted the local media for discussing potential economic cuts and raising taxes.

“All the talk about the need to open the budget and make cuts, the talk about the need to raise taxes, God forbid, are nothing but lies, which are part of a media campaign against the government and are designed to scare the public,” the finance minister argued.

“We are concluding the first four months of the year meeting our collection goals and even more than that,” added Smotrich.

However, the finance minister did admit there has so far been a “small decline” in 2023 “compared to 2022, which was an unusual year.”

The government’s controversial judicial overhaul plan has put additional pressure on the Israeli economy due to investors’ growing concerns over an independent judiciary.

Following Moody’s recent downgrade of Israel’s credit outlook, Prime Minister Benjamin Netanyahu has been busy trying to prevent a similar downgrade by rival credit agency.

This article originally appeared on All Israel News and is reposted with permission.