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Taub report: GDP-debt ratio grows to 75% - deficit to 11% | Israel today

2020-05-20T22:20:28.652Z


| economyPresident of the Taub Center, Prof. Avi Weiss, anticipates significant recovery from the crisis that will be felt in the economy as early as next year • "Inequality in Israel narrowed due to the joining of second earners in the labor market" Growth on the road // Photo: Dudu Greenshpan Israel's debt-to-GDP ratio will grow to 75% and the deficit to 11% as a result of the Corona crisis, up from 6...


President of the Taub Center, Prof. Avi Weiss, anticipates significant recovery from the crisis that will be felt in the economy as early as next year • "Inequality in Israel narrowed due to the joining of second earners in the labor market"

  • Growth on the road // Photo: Dudu Greenshpan

Israel's debt-to-GDP ratio will grow to 75% and the deficit to 11% as a result of the Corona crisis, up from 60% and 4% before it - according to Prof. Avi Weiss, president of the Taub Center. 

The state of affairs report in Taub that GDP per capita, which has stood at 1.5% in the past two years, is expected to fall by more than 7% in the current year but "correct" itself as early as next year. It also states that the relatively low debt ratio allows the government to turn Capital markets as a source of funding for the large deficit created by the decline in tax revenues and the growing need to support the business sector and households. 

According to the report, inequality in Israel, unlike other countries, has narrowed following the arrival of two earners in the labor market and the rise in real wages at the bottom of the income distribution. The corona is expected to bring down wages - and these will mainly hurt newcomers to the labor market.



Labor productivity growth in Israel has slowed in the last two decades, in part due to the entry of low-skilled populations into the labor market, such as ultra-Orthodox men and Arab women. The low productivity indicates a private investment in physical capital in the economy - a situation that will continue for a long time. 

According to Weiss, "The Corona crisis may reduce the gap due to the large public investment expected in the health care system. Investments in the transportation system also appear to be accelerating."

Source: israelhayom

All news articles on 2020-05-20

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