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Israelis enjoy higher life expectancy and have a much younger demographic profile than most OECD countries. However, the demand for health care is expanding rapidly due to population growth and ageing.
Ensuring tax and transfer systems bring sufficient revenue to reach macroeconomic fiscal targets, address societal goals in re-distribution and social welfare, recognise the influence taxation has on businesses’ competitiveness and adequately address environmental externalities is a tough challenge, arguably more so in Israel than in many other OECD countries.
Israel’s output growth remains relatively strong and unemployment is low. However, living standards remain well below those of top ranking OECD countries, the rate of relative poverty is high, and there are environmental challenges.
Israel’s economy is in good shape, but further efforts are needed to fight poverty and close the gap in living standards with other leading nations, according to the OECD’s latest Economic Survey of Israel.
With the right policies, narrower socio-economic divides and higher levels of well-being are well within Israel’s reach. Raising educational standards and encouraging employment, maintaining sound monetary policy and a responsible fiscal trajectory, pressing on with structural reforms that encourage innovation, competition and creativity – these are all central to achieving sustained, inclusive growth.
Two years after Israel joined the OECD, Sharon Kedmi, Director General at the Ministry of Industry, Trade and Labor, is leading a delegation to an important OECD Employment Labour and Social Affairs Committee meeting on 26 October. He spoke with the OECD Observer.
Israel’s economy has shown resilience during the global recession, but more active education and employment policies – particularly targeted at minority groups – are needed to bolster its economic performance and bridge deep divisions within its society, according to the OECD.