The latest economic survey of the Organization for Economic Cooperation and Development, which was published every two years, estimates that growth in Israel is recovering but weaker than predictions. According to the survey, it will remain high and away from the goal next year.
Contrary to other expectations, the Organization for Economic Cooperation and Development expects inflation by 3.7 % in Israel during the next year. Other predictions see inflation less than 3 % of the high point in the target bank of Israel, during the next year.
In order to deal with the Organization for Economic Cooperation and Development, the Organization for Economic Cooperation and Development recommends that the Israeli government take many restrictions, in order to get out of the economic storm established by the war, such as canceling value -added tax exemptions, increasing carbon tax rates while returning taxes on sugary drinks and plastic materials for one use. Economists in the Organization for Economic Cooperation and Development in the Organization for Economic Cooperation and Development supports the miles tax to expect the end of the decrease in fuel tax and electric cars.
“The Israeli economy was significantly flexible in the shock of terrorist attacks on October 7 and the subsequent war. This force is under very difficult circumstances that stem from its proper financial situation before the war, skilled monetary management, a stable financial system, and strong growth due to high employment rates,” says Economic Cooperation and Development.
He adds: “Preserving the economy is constant and securing strong growth that requires curbing inflation and contains a financial deficit during the financing of future spending needs.” The Organization for Economic Cooperation and Development stressed that economic policy must maintain economic stability to return to growth, including moderate inflation, which reduces the deficit and support the measures that will contribute to long -term growth.
The most expensive country in OECD
The cost of living in the report is emphasized. Israel is still classified as the most expensive country in the Organization for Economic Cooperation and Development, while the per capita share of Israel in GDP is less than average. The result is the damage to the weakest sections: “Families with low income are especially low at the cost of living, as they spend almost all of their income on basic goods and services such as food, housing and transportation.”
Many reasons for this: According to the Organization for Economic Cooperation and Development in the Organization of Economic Cooperation and Bureaucracy and Planning Planning, it harms the exhibition capacity of apartments and raising prices. In addition, obstacles to trade and imports increase the price of imported products for both companies and consumers. However, the report notes that there was some improvement in this aspect.
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At the same time, do not achieve some of the solutions that have been implemented, such as subsidies and a unified price for some products, the required relief. OECD recommends removing the fixed price system. “The most lenient regulations in the market will facilitate the entry of new companies and enhance competition,” the survey says.
Expect recovery, but inflation will remain high
It is expected that the economic data of Israel, according to the analysis of the Organization for Economic Cooperation and Development, will show a recovery. The annual gross domestic product growth will increase to 3.4 %, which is slightly less than the last expectations of the Bank of Israel, which Israel will grow by 3.8 % next year.
Looking at the war, the Organization for Economic Cooperation and Development says that the risks that follow both the upward trend and the negative aspect are still high. On the one hand, “renewed calm can reduce some restrictions imposed on the side of the supply, release pent -up demand and help international trade activity. In addition, new agreements with countries in the Middle East may contribute to increasing trade and investment.”
On the other hand, it is clear that the escalation may increase the exacerbation of the current situation of Israel and directly harm economic activity.
On banking profits, which last year recorded a record total profit of about 30 billion and drew many criticisms, the survey confirms that bank margins in Israel in the average countries of the Organization for Economic Cooperation and Development. Because of the risks caused by the war, the survey is written, the margins should be higher, in order to maintain the security of banks. The Bank of Israel advises the Organization for Economic Cooperation and Development to take steps to support competition, while maintaining the stability of the regime.
The Organization for Economic Cooperation and Development also dealt with the lack of workers in the construction industry due to the war, which it says has contributed to damage to the gross domestic product and needs to be corrected.
The survey highlights the challenge facing the Haridi sector and its integrity in the labor market: “Many young people in the Orthodox work sector receive high -quality education in basic professions, which reduces their ability to integrate into the labor market, its productivity and wages, if they join it.”
The survey also recommends that the budget of educational institutions Hardi be conditional on the provisions of the basic program and that the allowances or incentives that encourage the participation of Bahraini men in the labor market. The survey says: “Removing the benefits that discourage the work of the work of the work of work will also contribute to increasing the employment rate,” the survey says.
This is not the first time that the organization has raised the need to increase the rate of employment between the Haridi community and the Israeli Arabs. The previous survey also indicated two years ago to the potential to encourage employment among these residents.
Technology sector support is very important
In the chapter, which addresses the effects of artificial intelligence on the Israeli economy, the Organization for Economic Cooperation and Development wrote that Israel should continue to support the technology sector by removing bottlenecks in terms of advanced education and academic research in areas that are decisive to Amnesty International while maintaining a supportive regulatory framework. In the rest of the economy, spreading artificial intelligence can achieve great productive advantages in light of the appropriate skill policies. “
Finance Minister Paisalel Soutrich answered, “The Economic Cooperation and Development Organization report is a testament to the flexibility of the Israeli economy and the hard work that has been made in recent years. It provides us with great challenges but also opportunities for growth and progress.
It was published by Globes, Israel Business News – En.globes.co.il – on April 2, 2025.
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