Minister of Finance Yuval Steinitz spoke optimistically about the Israeli economy 2011, but he is worried about 2012, because of the economic situation in Europe and its effect on Israel. He predicts 4.8% GDP growth in 2011, compared with the Bank of Israel's forecast of 3.8%.
"We'll have 4.8% growth this year," he told the Knesset Finance Committee. "We're completing our second year of good growth, which is especially good when we see the European and US economies. Rapid growth means low unemployment. We succeeded, in contrast with other economies, in reviving non-financial investment in the economy, which has halted in the rest of the Western world, due in part to the Law for the Encouragement of Capital Investment. In this time of crisis, the most important thing is to avoid mass unemployment, which is a terrible economic and social blow. The signs have been positive so far."
Looking ahead, Steinitz said, "We're worried about 2012. Our economic and employment ship has not foundered, but the dark clouds are gathering and there is a storm around us. We are seeing a worsening crisis, compared with what we saw at the beginning of 2011. In the past six months, optimistic forecasts have dissipated. Instead, the US and Europe have reverted to a severe crisis, there is no improvement in jobs, and the Western European economy has collapsed."
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2011
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