A new report by the Organization of Economic Cooperation and Development (OECD) published on Wednesday indicated that the Israeli economy will further slow down in 2014 amid the austerity measures planned in the 2013-2014 budget.

The report, titled World Economic Outlook, foresees that the new tightening policy, set to close off the 11 billion U.S. dollars in deficit will offset Israel's export increment.

Growth is forecast to decrease to 3.4 percent in 2014 from 3.9 percent in 2013, according to the report.

However, Israel's forecast growth for 2013 and 2014 tops the average 1.2 percent and 2.3 percent growth average expected for the OECD's countries.

Much of Israel's growth will be driven from the Tamar gas field, discovered in 2009 offshore of Israel in the Mediterranean Sea, which will boost Israeli economy by one percent this year and by 0. 7 percent in 2014.

The report predicts Israel's export to profit from the forecast improvement next year in the economies of the U.S. and European Union, which are its the main export market.

According to the OECD, "public spending commitments and lower revenues than expected" drove the government deficit for 2012 significantly above original plans, to a rate of 4.2 percent of the Gross Domestic Product (GDP).

As a result, the Israeli government revised the deficit target for 2013 from 3 percent of the GDP to 4.65 percent.

The OECD further mentioned the government's efforts to close this deficit by value-added tax hikes and increased personal income and corporate taxes.

However, it said, there are still "uncertainties" as to the effectiveness of the measures taken up by the Israeli government in order to achieve the deficit targets, the OECD said.

According to the report, unemployment rate is forecast to rise from 6.9 percent in 2012 to 7.2 percent this year. Israel Central Bank might need to change its monetary policy as soon as next year, the OECD said.

"A tightening monetary stance, probably beginning in the second half of 2014, may be required to prevent inflationary pressure from taking hold," the report charged.

"Geopolitical and global economic risks present the greatest threats to growth," the report said. Endi

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