OECD lowers Israel 2013 growth forecast

The OECD has revised its growth forecast for Israel in 2013 down to 3.7% from 3.9%.

The OECD has revised its growth forecast for Israel in 2013 down to 3.7%. In its previous forecast six months ago it predicted 3.9% growth this year. The OECD sees even slower growth of 3.4% in 2014, and 3.5% in 2015. OECD expects unemployment in Israel to remain within the 6.6-6.9% band in the coming two years.

The OECD report published today said that, "A group of emerging countries in the OECD - Chile, Turkey, Mexico, Korea and Israel - continue to grow faster than the other advanced economies."

The report adds about Israel, "Natural gas production will provide encouragement for growth. Fiscal tightening will hit demand especially in 2014," and that, "inflation is low at the moment but there could soon be prices pressures."

The OECD calls on the Ministry of Finance to pull back from any idea of tax cuts and raise taxes. The report says, "Fiscal tightening in the 2013-2014 budget should not be reduced despite the unexpected positives in tax revenues. There should be a return seen on the horizon to more conventional monetary policies with base interest rates raised. Random intervention in the foreign currency market needs to end as global monetary conditions return to normalcy and capital movement stabilizes.

Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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