The Bank of Israel presented its 2011 report on the state of Israel’s economy to the government on Wednesday, in which it stated that Israel’s economy had successfully navigated significant domestic and global difficulties.
“In 2011, Israel’s economy grew by 4.7 percent, similar to its growth rate in 2010,” the report began. It highlighted “rapid growth” in investment in the business sector, as well as the “continued decline in the unemployment rate to 5.6 percent—its lowest level in more than three decades.”
The report was not all good news, though, as it noted that the European debt crisis forced a reappraisal of the inflation rate and inflation expectations during the year. It also cited an increase of 5.1% in rents and a 9.2% increase in energy prices.
The report also discussed the social protests of last summer, and the measures that have been taken to address them. It warned that since some of the measures approved “are not fiscally balanced, significant adjustments will be required…in order to prevent an increase in the deficit.
Stanley Fischer, Governor of the Bank of Israel told reporters that “[t]he state of the economy is good, but not excellent…Our forecast is that the growth this year will reach a rate of 3.1%, a respectable growth but not on par with the average levels witnessed in 2004-2008.”
Prime Minister Benjamin Netanyahu, after receiving the report said: “The Israeli economy grew more than most Western economies, almost 2.5 times the OECD average…In contrast to the collapsing economies around us, Israel’s credit rating was upgraded last year.”