The OECD has raised the growth forecast for Israel. Economic growth in Israel is expected to remain strong over the next two years, averaging 3.25 percent each year. Among the factors in that growth: Micro-economic steps to assist lower-earning Israelis, and slightly higher mortgage costs and interest rates to help cool off the real estate market.
The evaluation was released as part of a general overall end-of-year analysis of the economies of OECD member countries. According to the report, the steps taken by the Bank of Israel in recent months should be sufficient to enhance employment and increase consumer demand, but keep inflation in check. As long as inflation rates remain reasonable, growth will continue. With that, if the shekel rises too high, that could have a negative influence on the economy.
In addition, the report said, Israel needed to do more to increase competition between banks, and expand competition in areas such as agriculture. “The regulatory burden on business should be reduced, by cutting excessive bureaucratic licensing requirements,” the report said.