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OECD economists warn of the consequences of legal legislation - voila! money

2023-06-07T07:52:10.453Z

Highlights: The OECD is also concerned about the high level of inflation, especially core inflation. The organization criticizes government policies that do not deal with the demographic challenge and distance Haredim from the labor market.Overall, the OECD expects a stable future for the Israeli economy. The growth forecast for 2023 even received a slight upgrade, and will stand, according to the organization's economists, at 2.9 percent (instead of 2.8, the assessment last November, and in any case higher than Bank of Israel's forecast and other assessment factors)


The OECD is also concerned about the high level of inflation, especially core inflation, and criticizes government policies that do not deal with the demographic challenge and distance Haredim from the labor market


The demonstrations against the legal legislation. The OECD is also worried, but so far only warns (Photo: official website, Giti Palti)

While Finance Minister Bezalel Smotrich is working in Paris, he says, in order to expand and deepen cooperation with the OECD, the organization's economists issue a relatively moderate issue compared to what is expected in the Israeli economy.

Overall, the OECD expects a stable future for the Israeli economy: the growth forecast for 2023 even received a slight upgrade, and will stand, according to the organization's economists, at 2.9 percent (instead of 2.8, the assessment last November, and in any case higher than the Bank of Israel's forecast and other assessment factors).

Nonetheless, the organization raises several red flags: first and foremost the security situation and the growing tension in the region, a danger that almost constantly hovers over the Israeli economy.

Haredi students in the yeshiva. The organization is concerned about their non-participation in the labor force (Photo: Reuven Castro)

Two additional dangers identified by the organization are directly related to government policy: continued legal legislation that could harm the Israeli economy, and unwillingness, as reflected in the budget, to encourage Haredim to participate in the labor market.

What else worries the OECD? A decline in incomes and jobs in the high-tech industry, a decline in private consumption, and mainly inflation that is much higher than the defined inflation targets (around 5 percent instead of up to 3 percent), with an emphasis on core inflation (i.e., excluding food and energy), which is very high.

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Source: walla

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