Central Bank report shows ‘good, not excellent’ economy

Bank of Israel Governor Stanley Fischer submitted the bank’s annual report to President Shimon Peres and Prime Minister Benjamin Netanyahu on Wednesday. “The report reflects the current state of Israeli economy and the immediate future, and its essence is that the state of Israeli economy is good, not excellent,” Fischer said.

The governor was alluding to findings that show widespread non-participation in the workforce by the ultra-Orthodox and Arab sectors, and to Israel’s wide income inequalities — among the worst in the West, albeit showing some improvement.

Netanyahu called the results “impressive,” saying, “The Israel economy grew by 4.7% last year. This is impressive, especially in light of the fact that in 2011, the global economy was caught up in one of the worst crises it has known.”

In further praise of Israel’s achievements, Netanyahu pointed out that “the Israeli economy grew more than most Western economies, almost 2.5 times the OECD average. Additionally, unemployment in Israel dropped to its lowest level since 1983.”

The report, however, also includes alarming news. Israel maintains one of the highest income inequality rates among Western economies, in spite of a modest decline in the dimensions of the gap.

Another outstanding issue is the fact that only two thirds of the public take part in the labor market. Netanyahu pointed out the increase in the employment rate among ultra-Orthodox men, adding, though, that “there is still a long way to go on this issue.”