During the cabinet’s weekly meeting on Sunday, Prime Minister Binyamin Netanyahu addressed the Bank of Israel’s annual report on the Israeli economy.
Netanyahu touted the report’s findings, which showed declining unemployment and government debt, rising real wages, and declining prices. He also noted, however, that regulations and state bureaucracy were still constricting the economy and preventing it from reaching its full potential.
"A short while ago I received the annual report from the Governor of the Bank of Israel. The economy is at full employment; unemployment is at what they call 'an historic low.' This is good news. As a result of this, real wages have risen considerably and will rise in other sectors as well.”
“We also see a moderate decline in inequality. We still have much work to do here, but overall this is good news," he said.
According to the Bank of Israel’s report in 2015 the unemployment rate fell to just above 5%, the lowest level in more than 20 years.
Inflation, which has been in negative territory in recent years, remained at -1%, below the Bank’s target level. Despite the ongoing monetary deflation, wages increased in 2015 faster than in 2014, leading to rapidly rising real wages.
The government deficit also fell in 2015, dropping to 2.1%. Public-held debt as a percentage of GDP also fell dramatically in 2015, falling from 67.5% to 64.8%, the lowest level in decades.
While the Prime Minister found the report encouraging, he emphasized the importance of increasing economic growth. According to the Bank of Israel’s report, Israel’s economy grew by a modest 2.5%.
“The key to the future depends on growth. It must be understood that everything that we want to achieve vis-à-vis budgets, services and improving infrastructures, everything that is important for a citizen, requires growth.”
Netanyahu decried Israeli bureaucracy and government regulation, calling them impediments to stronger economic growth. Echoing statements made in March, he pledged to curb excessive regulations which he claimed were harming business.
“One of the reasons why the Israeli economy is not making full use of its potential is because there are excessive standards, bureaucracy and regulation. This excess is passed on to the consumer in the form of higher prices for services and, of course, we are dealing this today," he said.
"We will make a series of decisions today that will greatly simplify the establishment of standards in the State of Israel and will also allow the elected government to govern. We were elected in order to bring results to the citizen. We need the best tools to do this. In the end, we are tested by results, not by bureaucracy."