"There is always room for worrying about the economy, especially in the contemporary global economy, Governor of the Bank of Israel Prof. Stanley Fischer said at the "Global uncertainty and Israel's economic policy" conference at Bar Ilan University yesterday.
"Most of the economic uncertainty in Israel comes from the world. At the Bank of Israel, we constantly prepare our forecasts on the basis of the global economy. We're seeing a global economic recovery, but not an exceptional recovery. We expect 3% global economic growth, which the IMF defines as a recession."
"The global economic shape is not promising, including the US. We once thought that the US growth rate was minimal, but we’re now pleased that it is projected to have 2% growth. We expect a recession in Europe, but we can cope with that. If a financial crisis develops in Europe, we'll have a much tougher time."
As for Israel, Fischer said, "Israel has a respectable standard of living, at about $30,000 per capita, about the level of Spain and much higher than Greece."
As for the Israeli economy, he said, "We forecast 3.1% growth in 2012, less than the rate in the past decade. We predict some improvement in 2013, but a lot depends on what will happen in Europe, and we have no influence there."
As for the problems in Israel's economy, Fischer said, "A very big problem is that Israel has bureaucracy in many sectors. There is constant talk about improving the situation, but we still don’t see it. There are a lot of aspects of doing business where we're not very good.
"Another problem is poverty in Israel, which is very serious. The prevalence of poverty in the non-Arab and non-haredi (ultra-orthodox) population is stable, but poverty among Arabs and haredim is rising. Dealing with this is one of most important challenges facing Israeli society. We cannot continue on this road - something will have to give."
Published by Globes [online], Israel business news - www.globes-online.com - on April 18, 2012
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