Early ballot will not shake Israel's economy -finance minister

* Government will carry 2012 budget until new one passed

* Steinitz expects 2013 budget by March or April

By Maayan Lubell

JERUSALEM, Oct 10 (Reuters) - Finance Minister Yuval Steinitz said on Wednesday Israel's financial stability will be maintained in 2013, despite an early election called after the government was unable to agree on a budget.

"In July ... half the budget, the revenue side of it, was already passed, in order to make sure ahead of time that if the (full) budget is not passed, that revenue, deficit and financial stability will be preserved in 2013," Steinitz told Army Radio.

Prime Minister Benjamin Netanyahu announced on Tuesday he will seek an early election after he was unable to agree with his coalition partners over proposed cuts in the 2013 budget.

Parliament will dissolve itself in the coming days and fix the election date, with Netanyahu in charge of a transitional government until a new administration is sworn in. The vote is likely to be held in January.

Steinitz said that in the first few months of 2013, the government will continue working with the 2012 budget, taking a 12th of it monthly until a new budget is passed.

"The election will probably be held in January. I presume that in February, Benjamin Netanyahu will have formed his new government and by March or April there will already be a new budget," Steinitz said.

Netanyahu has been under pressure from Israel's central bank to maintain fiscal credibility at a time when the economy is slowing and tax revenues are falling short.

Israel's cabinet approved a package of tax hikes and spending cuts in July, measures the Finance Ministry had said would add 14.4 billion shekels to state coffers next year.

In an interview with Reuters last month, Steinitz said the 2013 budget calls for 10 billion to 14 billion shekels' worth of cuts in order to reach a 3 percent of GDP deficit target.

Israel's economy weathered the global economic crisis well until a year ago, when exports began to slow as a result of downturns in Europe and the United States, its two largest trading partners.

Exports account for about 40 percent of Israel's economic activity. The central bank forecast in September the economy would grow 3 percent in 2013, down from an estimate made in June of 3.4 percent.

($1 = IS 3.862)

(Writing by Maayan Lubell; editing by Ron Askew)

((maayan.lubell@thomsonreuters.com)(+972 2 632 2202)(Reuters Messaging: maayan.lubell.thomsonreuters.com@thomsonreuters.net))