OECD: Israel’s Economy Among the Top for Growth, Unemployment

An Israeli flag flutters outside the Bank of Israel building in Yerushalayim. (Ronen Zvulun/Reuters/File)

A new report by the Organization for Economic Cooperation and Development (OECD) says that Israel’s economy “continues to register remarkable performance, with strong growth, low and falling unemployment and sound public finances leading to the 15th consecutive year of economic expansion.” However, it adds, “further reforms will be needed to drive down inequality and raise living standards for all Israelis.”

The report is part of the organization’s annual survey of member nations, which consists of the world’s most advanced economies. Growth in Israel has averaged in excess of 3 percent for many years, beating the average for OECD growth. According to the report, growth for 2018 and 2019 is projected at 3.5 percent. The report quotes OECD Chief Economist Alvaro Pereira as saying that “the Israeli economy has grown faster and more consistently than nearly any other in the OECD for the past 15 years. Unemployment is at historically low levels, and the rise in people with jobs has had a significant impact on the continuing convergence of living standards in Israel with those in the most advanced economies. Today’s excellent outlook offers Israel a unique opportunity to prepare for the challenges of the future, by taking steps to raise productivity, improve social cohesion and guarantee high quality of life for all Israelis.”

With that, there were some sorely needed reforms that needed to take place. “Labor force participation rates, education and skill levels remain low” for Arabs and chareidim, “contributing to Israel’s high poverty rates and low productivity. Better social and labor market integration of these groups, which will represent half of the population by mid-century, is crucial.” Infrastructure is also an issue, and “addressing Israel’s large infrastructure deficit, especially in public transport, would reduce the country’s considerable road congestion and poor air quality while improving access to the labor market, particularly for disadvantaged groups living in peripheral zones. Better infrastructure in disadvantaged areas, especially Arab cities, would improve job prospects and well-being,” the report said.