Israel's deficit reached 5.37 billion shekels (1.37 billion U.S. dollars) in June, bringing the country's deficit to 9.7 billion shekels (2.48 billion dollars) in first half of 2012, the country's Finance Ministry announced Wednesday.

June's deficit, which climbed to 3.7 percent of the Gross Domestic Product (GDP), is 1.2 percent more than the 2.5 percent deficit target for this quarter, according to the Treasury.

The yearly 2012 deficit was pegged 18.4 billion shekels (4.7 billion dollars), but updated tax forecasts raised fears the government won't be able to meet the goal.

Last week, Israeli Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz revealed plans to deal with the budget gap, including increasing the 2013 budget deficit target to 3 percent of the GDP.

The cabinet authorized the plan at its weekly meeting on Sunday.

Bank of Israel Governor, Stanley Fischer, is expected to meet with Standard & Poor's (S&P) financial rating agency officials on Wednesday, according to the Globes business newspaper, in hopes of dissuading them from lowering Israel's current A+ credit rating.

Israel's credit rating reflects the risk level of government bonds. The rating is a critical figure for raising capital on international markets, since it affects the interests on bonds issued and the cost of raising them.

There is a direct connection between the rating and the interest rate.

Israel's geopolitical situation also affects the rating, and its position has deteriorated in the past year, due to events in Iran, Egypt, and Syria.

S&P officials are expected to request the rationale behind the 2013 3-percent deficit plan. According to the report, the team is also likely to ask what operative measures the government plans to employ in order to achieve the new target.

Financial experts and analysts expect the actual deficit to hit a 4.5 percent.

S&P will publish Israel's new rating along with other countries in its annual report, set to be released in two months' time.