Israel’s central bank chief says demographic changes such as aging and the larger proportion of Arabs and ultra-Orthodox Jews in society threaten the country’s long-term growth prospects.

Karnit Flug spoke Monday, a day after Israel’s Central Bureau of Statistics announced that Israel’s growth rate for the second half of 2013 was 2.8 percent — down from a 3.8 percent rate the previous year.

She said the low rate of employment among ultra-Orthodox men and Arab women in particular was hindering growth. She said both segments were showing increased employment, but without a drastic change Israel would suffer in comparison to other developed nations.

Arabs make up about 20 percent of Israel’s 8 million citizens. The ultra-Orthodox are less than 10 percent. Both are among the fastest growing segments of society.

Copyright 2014 The Associated Press