´We still must navigate through economic storm´ (JERUSALEM POST) By ILAN EVYATAR 04/25/12)
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It may be sailing on stormy waters, but Israel’s economy is in strong
shape going into its 65th year, Finance Minister Yuval Steinitz told
The Jerusalem Post in an interview ahead of Independence Day.
Steinitz described Israel’s growth figures of 4.8 percent for 2011
as “quite exceptional” and noted that it had posted the fastest
economic growth in the Western world in 2010 and 2011, as well as
being the only country in the developed world where the level of
investments in the real economy had actually gone up.
However, Steinitz cautioned that Israel was not yet out of the
woods. “Generally speaking one can say that the Israeli economy today
is in better shape than it was [when the global economic crisis broke
out] in 2008... But we are not yet harboring in the port; we still
have to navigate our way in the ongoing economic storm,” he said.
“Israel was always famous for the ability of this little nation to
defend itself, but over the last three years we have become quite
well known for our capacity to defend ourselves economically,” he
added. “I think this is a great and important achievement by Israel
and its people.”
Steinitz said Israel’s impressive growth was due to the government
decision not to pour money into the economy through stimulus plans
and tax cuts, a policy he said the US and other countries had
adopted, and one that he derided as “sacrificing the future to save
the economy for the present.”
The finance minister did not rule out raising taxes if the budget
deficit continued to increase.
“Currently at least, the picture [for 2012] is that we believe that
we will end up with a deficit of around 3.3%, slightly higher than
what was planned [2%] but not that significant,” he said.
“Until now I didn’t decide to initiate any new taxes because it was
unnecessary; if the deficit is 3.3% because our revenues are going
down a bit this is not terrible...I won’t give any figures, but if it
will be beyond the range of 3-4% we might reconsider.”
Steinitz said he understood why people felt they were not sharing in
the country’s economic success and was aware that this summer may see
a repeat of last year’s social justice protests despite steps taken
by the government.
“There are many things to be fixed in the Israeli economy and society
and therefore I can understand why people are not satisfied despite
the country’s economic success,” he said. “We have a lot to fix in
society and we are doing it, but it takes time.”
The full interview will appear in Friday’s paper. (© 1995-2011, The
Jerusalem Post 04/25/12)
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