The Bank of Israel published a report about the economy of the country in 2017 according to the law on the Central Bank from 2010. The report was presented to President of Israel Reuven Rivlin.
According to the report, in 2017 the pace of economic growth was 3.4%. Thus in contrast to the two previous years, when economic growth was based solely on the growth of private consumption, this year his Foundation is more balanced due to growth in exports and flourishing tourism.
For the first time in 2014 in the country recorded positive inflation (0,4%), but it is still below the lower boundary of the planned corridor of inflation in the 1% -3%.
The state budget deficit amounted to 2%, 0.9% lower than planned. The ratio of public debt to GDP continued to decline and amounted to 60.8%.
Commenting on the activities of the government, the Bank of Israel calls to stop tax cuts and initiate the abolition of unjustified tax benefits, simultaneously increasing social spending of the government.
It is noted that the activities of the government in the current format is based on a one-time tax revenue, and that in the absence of changes in 2022, the government will have to raise at least 12 billion shekels to cover commitments. The Central Bank also recommended the government to consider the economic cycle and set aside funds for a «rainy day» to preserve freedom of action, when the country was a crisis and will require substantial public funding to overcome it.
The report once again underlines the isolation of the «economy of high-tech» from other sectors of the economy in which there is a low level of productivity. In the Bank of Israel recommended that the government invest in training in improving the infrastructure in the first place – public transport.
The Bank of Israel insists on the ineffectiveness of the program «Housing for newcomers», noting that young people prefer to buy housing on the open market.