Bank chief blames slowdown on ultra-Orthodox, Arabs

Karnit Flug says that low rates of employment among Haredi men, Arab women hinder Israel’s long-term economic growth

By AP 17 February 2014, 4:10 pm

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Governor of the Bank of Israel Karnit Flug during a meeting of the Finance Committee in the Knesset in Jerusalem on January 06, 2014. (Photo credit: Flash90)

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.