According to a new economic report published in May by the Organisation for Economic Cooperation and Development (OECD), Israel’s sustained economic growth is projected to strengthen to over 3.5 % in the coming year, while social gaps and inequality remain prominent.
Israel’s economy continues to perform, but social inequality remains prominent. And yet, with the overall economic performance, social gaps remain a persistent issue in Israel.
The gaps in efficiency and social cohesion remain substantial in the Israel’s economy. Thanks to cautious fiscal and monetary policies, Israel’s economy is enjoying today one of the highest growth rates among the world’s major Economys, but it has failed to tackle the problems of social gaps and inequality.
That was the bottom-line conclusion of the 2018 economic OECD report that urged Israel to invest more in education, welfare, public transportation, health and vocational training. The report similarly highlights that promoting investment in the poor Arab and Haredi sectors can both increase long-term growth and enhance social cohesion. With that, making growth more sustainable and more inclusive will demand a package of structural internal reforms.
Israel 2018: a brief profile of the economy well-being
Israel’s economy “has grown faster and more consistently than nearly any other in the OECD for the past 15 years”. It has strong fundamentals and continues to register remarkable macroeconomic performance, with an average growth of 3.3 percent since 2012, according to the latest economic report that was presented in Jerusalem by Alvaro Pereira, the OCEDs’ acting chief economist, Shai Babad, the Israeli Finance Ministry Director General, and Yoel Naveh, Israel’s chief economist.
The country’s real Gross Domestic Product (GDP) expanded 4.25 % in the last quarter of 2017 and the first quarter of 2018 and economic growth for 2018 and 2019 is expected to tick up to 3.5 %, in line with the central bank estimates. The OECD attributed its projections to an accelerated consumer spending and a robust high-tech sector. It also identified that inflation rate is still under control and expects a 1.7 % rate in 2019.
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