Monday, December 16, 2013

IMF Concludes Assessment of Israel's Economy

The IMF concluded its assessment of the Israeli economy today, with a brief summary statement. The full report will be published sometime in the coming weeks.

No big surprises so far, but worth noting a few issues:
  • The Israel economy is performing rather strongly with growth of 3.5% expected this year. Without the discovery of large gas reserves, the economy would have grown by 2.5%.
  • Concern over rising house prices in Israel which, according to the IMF, is driven by constraints in supply rather than a bubble (i.e. not enough houses being built);
  • The government has been able to cut spending even faster than its own target;
  • Finally, the summary highlights the importance of "addressing low labor participation rates of Haredi and Israeli Arab communities". The full report will hopefully provide some further details;

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