Will Israel's Recent Growth Spark a Development Leap?

Recent data shows strong growth in Israel's economy. In order to reach a development leap, this growth must continue.

In an article in Haaretz, Moti Bassok discusses promising data recently released on Israel's economy1:

  • 6.6.% growth p.a. in GDP for the first half of 2007, exceeding market expectations
  • The GDP gap grew from 6.9% in the first quarter to 7.4% this quarter, widening the difference between actual and potential GDP
  • A strong increase of 5.7% in private consumption per capita, indicating an increase in the standard of living

Economic growth is an underlying driver of Quality of Life, the main focus of the Top 15 Vision.

The Reut Institute contends that in order to reach this vision, Israel must reach beyond stable economic growth to a true development leap. This calls for a-cyclical changes in underlying economic trends that will bring about significant and consistent long term growth of at least 6% p.a.

In 2006, growth was due to an increase in the global demand for Israel's goods as well as an increase in employment and investment by growing businesses. However, to ensure substantial improvement in the quality of life of Israel's citizens, the government must adopt policies seeking to increase labor force participation and productivity.

1 Basook, Haaretz, 8/23/2007. Full article