"We have a demographic challenge. If the current growth rates continue, the secular population will become a minority within decades, and the process in which a segment of the population characterized by a low rate of participation in the labor force becomes the majority cannot continue if we are to maintain the rise in the standard of living," said Governor of the Bank of Israel Prof. Stanley Fischer at the Interdisciplinary Center Herzliya's Economic Conference yesterday. "I am pleased that we are already seeing changes in this area," he added.
Fischer expressed his deep concern about the low participation in the workforce by haredim (ultra-orthodox), saying that, belying expectations, the increase in participation in the workforce was not because haredim and Arabs were joining it. "The unemployment rate in 2012 was the lowest in 30 years, and was reflected in the increase in participation in the workforce, which is a very important development for the Israeli economy. We don’t yet know which part of the population is responsible for this, but it probably isn't the haredim and Arabs."
As for the Bank of Israel's prediction that more tax hikes will be needed in 2015, Fischer said, "We have a thriving economy with a budget problem that the government has begun to tackle. This week, we published an analysis, which states that the government will have to continue cutting spending in 2015-16, but these are much smaller amounts than we handled for 2014. We're not talking about frightening amounts."
Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2013
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