The Jewish state could be one of the most developed nations if the government accelerates economic reforms, according to the governor of the Bank of Israel.
In presenting the central bank’s annual report at a news conference Tuesday, Jacob Frenkel, bank governor, said the economy was “comfortably situated” to continue to grow at an annual rate of about 5 percent in coming years.
The 400-pages report summarizes 1994 data from the Central Bureau of Statistics.
Frenkel pointed out a 6.5 percent growth of the economy, a 7.5 percent increase in industrial output and an increase in exports by more than 10 percent. He also noted that unemployment has fallen from 10 percent to 7.8 percent, despite continuing immigration.
But he warned that the economic boom has been accompanied by relatively high inflation, which was 14.5 percent last year, and an increase in private consumption.
Frenkel welcomed a recent government decision to cut taxes and spending to accelerate privatization of state-owned companies by issuing stock options to the public.
Despite what has occurred, the bank bank governor said, more was needed.
“In 1994 there was insufficient progress,” he said, adding that a reduction in government involvement in the economy and the acceleration in privatization will increase the stability necessary for growth.
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