The annual report of the 2024 Bank of Israel contains harsh criticism of the government's financial policy. Budgets for war years, which were approved only on Tuesday only, contain convergence measures to deal with increasing defense spending, but Professor Amir Yaron wrote in the opening notes of the report: “These measures are not enough to ensure a continuous decrease in the debt ratio to GDP.”
The bank added, “Besides the total economic responsibility expressed in the budget, the formation of the amendments taken by the government did not contribute to facing the economy with the damage caused by the war and the possibility of growth when it ends.”
Bank of Israel stressed that the government did not focus on limiting spending in important elements, such as those that harm or financing activities or that harm workers and work productivity, especially the coalition funds.
The report provides the government a lot of food for thinking, and also provides a number of recommendations for the economy. It indicates that civil spending that contributes to long -term growth, which is investing in education, transportation and material infrastructure, should be avoided. Data indicates that Israel lacks sufficient investment in these areas. The report also emphasizes that “an important way to increase GDP and the tax base to finance public needs is to increase the ability to win and share all parts of society in the labor market in general, and in the high -tech sector in particular.”
“Whenever the institutions are affected, the more reflected in the economy.”
At the press conference, after the publication of the report, the ruler was asked about the latest government's movements and interests in the markets about the refusal of the public prosecutor. He answered that the Israeli economy is already flexible, but “throughout February 2023, I talked about the fact that there is intense literature on the relationship between the strength and independence of institutions, and their economic growth. The more affected institutions, the more it will be reflected in the economy.” He said: “I cannot imagine a situation in which there is a ruling in the Supreme Court, and they will not obey it.” Upon the dismissal of the public prosecutor, “
In recent classification agencies, the ruler said that the evaluation agencies have confirmed that the growth expectations of the Bank of Israel (Moody's expects 3.8 % this year) and stressed, “We must listen to the classification agencies. The risks they refer to affect the economy, and reduce them may support economic recovery.”
It was published by Globes, Israel Business News – En.globes.co.il – on March 27, 2025.
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