Speaking about the cost of living, Bank of Israel Governor Dr. Karnit Flug told the "Globes" 2014 Israel Business Conference that Israeli products are not overpriced. She said that with elections on the way, the political dialogue on the matter is "extreme and sometimes superficial." She claims that prices have risen "in a reasonable way' in recent years and said she opposed outgoing Minister of Finance Yair Lapid's attempts to put more products under price supervision.
She said, "The price of Milky by itself won't solve the cost of living problem. The cost of living touches on the main processes taking place in the economy and influencing the standard of living of Israelis over time. Public protest is an important tool and sometimes required to lead an examination and change but for such an examination to lead to substantial, deep, real, and serious change, it cannot be enough to just point to the symptoms or slogans."
Flug added, "The correct thing, even more so these days when the political dialogue is expected to be more extreme and sometimes even superficial, is to base debate on facts and educated analysis."
She pointed out that in the 11 years since 2003, inflation has always been in the government's 1-3% range and accumulated inflation was 23% - an average of 1.8% annually. She agreed that food (39%) and housing (40%) has risen more than this but other items such as clothing had fallen in price 26%.
Published by Globes [online], Israel business news - www.globes-online.com - on December 8, 2014
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