“Israels economy passed through the 2008-09 global downturn in relatively good shape but is now suffering alongside others from the continuing effects of the renewed global crisis, and geopolitical tensions have increased. So far there have been no major failures in the financial sector or need for any extraordinary fiscal stimulus. This has helped avoid a substantial increase in public debt. Furthermore, there have been substantial new finds of offshore natural gas, which will strengthen the fiscal position, further decrease dependence on imported fuels and improve options regarding energy security. However, the low interest rates generated by the monetary-policy response to the crisis have contributed to a rapid increase in property prices, which are approaching bubble proportions. Persistent weaknesses in per capita income growth and a high rate of poverty, especially among certain communities, remain key long-term challenges. In addition, middle-class concerns have surfaced in the form of the recent tent protests, with complaints about the cost of housing and price levels in other sectors figuring prominently. These concerns are linked to debate about the level of competition in the economy and the role of Israels large family-run business groups, which play a significant role in the financial sector and in many non-financial sectors too.”
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