The Bank of Israel yesterday published its annual report about the Israeli economy and although it depicted economic performance in a very positive light matters quickly degenerated into an exchange of insults between the Ministry of Finance and the Bank of Israel.
The Ministry of Finance responded to the report by saying that Israel's economic achievements are "despite the Bank of Israel's obstacles" The Ministry of Finance added, "The Ministry succeeded in lowering housing prices after 12 years, the reduce taxes, and grow the Israeli economy despite the difficulties and obstacles that the Bank of Israel maneuvered about."
The Ministry of Finance statement continued, "To our great regret the Bank of Israel the Baqnk of Israel continues to lead policies that mainly serve interested parties. The Israeli economy is in the best shape that it has been for decades due to three years of hard work and courageous measures led by the Ministry of Finance headed by Minister of Finance Moshe Kahlon for the citizens of Israel and despite the conduct of the Bank of Israel."
Bank of Israel Governor Dr. Karnit Flug said, "I don't understand the response of the Ministry of Finance. I have a feeling that whoever wrote this response did not read the details of the report and was maybe swayed by reading headlines here and there."
The Bank of Israel's annual report itself focused on the economic achievements and the strengths of the economy and downplayed the weaknesses and criticism.
The report outlined how the economy is growing, salaries are continuing to rise, the public's assets portfolio is growing, and even the Tel Aviv Stock Exchange is recovering after years of sluggishness. Prices in Israel are not rising, public debt continues to grow but not at a worrying pace and growth in the high-tech sector is on a global scale and even housing prices have stopped rising.
Was there criticism? The report did say that cutting taxes could create a problem for future governments, a growing lack of engineers was threatening high-tech, which employs too few people in the periphery, and that the umbrella housing construction agreements might endanger local authorities.
The more sensitive issues such as low productivity, the halt in previously growing participation in the workforce of Arabs and ultra-Orthodox Jews, the failures in the education system and the massive cost of the homebuyers price program (mechir lemishtaken) will have to wait, maybe, for the next report.
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2018
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