Lapid Contests Reports of Slowdown


Finance Minister Yair Lapid challenged on Tuesday newly released reports showing a slowdown in the Israeli economy, Globes reported.

Despite cautionary data from Israel’s Central Bureau of Statistics and the OECD, Lapid claimed that 5% annual growth was not an unrealistic goal.

The Central Bureau of Statistics said in a report on Sunday that growth is slowing, citing a decline in exports and a wave of layoffs.

The OECD on Tuesday revised downward its growth forecast for Israel in 2013 to 3.7%. Six months ago, it foresaw 3.9% growth this year. The outlook for 2014 is less encouraging, at 3.4%, and 3.5% in 2015. OECD expects unemployment in Israel to remain within the 6.6-6.9% range in the next two years.

The OECD offered support to Ministry of Finance officials who reacted with dismay to recent media reports of tax relief in light of unexpectedly high revenues.

The report says, “Fiscal tightening in the 2013-2014 budget should not be reduced despite the unexpected positives in tax revenues. There should be a return seen on the horizon to more conventional monetary policies with base interest rates raised.”