The IMF is flattering and states: Israel has suffered less than others • Recommends increasing health support and encouraging return to employment • Katz: "Expressing confidence in the economy"
Bank of Israel.
"Expressing confidence in the stability of the Israeli economy"
Photography:
Oren Ben Hakon
Israel has suffered less economically than other developed countries, thanks to a "vigorous response from the Bank of Israel and the government with support for the health care system, businesses and households" - according to the World Monetary Fund.
Although the fund intends to improve Israel's growth forecast for this year, close to a 6% decline in GDP, it will probably also slightly reduce its growth forecast for 2021.
The Fund recommends rushing to submit a budget for 2021. The IMF review published yesterday was submitted to Finance Minister Israel Katz and the Governor of the Bank of Israel, Prof. Amir Yaron, and is expected to be published in full next month.
The fund's report describes how Israel entered a crisis from a strong opening position: with high growth, the lowest unemployment rate in two decades, high capital in banks and low interest rates charged by the government on its loans. "Israel's financial system was most prepared to deal with the shock of the corona." In the document, mainly thanks to the "conservative business models" of the banks.
The fund recommends that the government increase support for the health care system, including funding hospitalization infrastructure in the event of another outbreak of the plague.
In the labor market, the fund recommends changing the structure of incentives so that unemployment benefits are given only to those who do not find work, so as not to delay the return to high employment.
On the issue of taxes, the fund recommends progressive taxation, which varies according to the volume of income, in order to reduce inequality.
Finance Minister Israel Katz welcomed the report: "The report published by the International Monetary Fund is another expression of confidence in the Israeli economy and its stability, after S&P chose to keep the State of Israel's credit rating at AA - this is further evidence of great appreciation. The Israeli economy has strength and strength in an international comparison. "