IBI: OECD membership will boost Israeli economy

IBI chief economist Ayelet Nir: foreign investment in Israel strengthening.

IBI Investment House Ltd. chief economist Ayelet Nir sees OECD membership as boosting the Israeli economy. She said, "In the long-term the flow of foreign investment into the Israeli economy is expected to strengthen as a result of joining the OECD."

Nir continued, "In addition, Israel's credit rating is expected to be upgraded and this will reduce the cost of raising capital for both the government and companies - but I am skeptical about this because in my opinion the main barrier today to raising Israel's rating is not economic but political and the security situation. Maybe S&P and Fitch will close the gap with Moodys, which ranks Israel one grade higher than them at A1. But I do not expect this will happen following accession to the OECD, if it did not happen following the impressive improvement in Israel macroeconomic figures, especially compared with developed economies."

Nir added, "Israel's accession to the OECD is first and foremost a mark of respect because we are talking about a very exclusive club. The need to meet the standards required by the organization will obligate the Israeli economy to remain open (without trade barriers), to keep the rules regarding money laundering, prevent corruption, protect intellectual property and so forth."

Published by Globes [online], Israel business news - www.globes-online.com - on May 10, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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