Israel: 2008 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Israel
IMF Staff Country Reports, February 17, 2009
Source details
- Canonical URL
- Israel: 2008 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Israel
Other formats
Bibliographic details
- Published: February 17, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451819663.002
Executive summary
- The staff report for the 2008 Article IV Consultation of Israel examines economic developments and policies.
- Fiscal and monetary credentials have been established in markets.
- Banks and their supervisory arrangements have been robust.
- Growth has been strong, sustained, and balanced.
- Public debt has been much reduced, to about 80 percent of GDP, but it remains vulnerable.
- Domestic securities prices tracked those abroad downward, prompting outflows from provident funds, while flows in domestic credit markets remained largely undisturbed.
Key findings
- Fiscal and monetary policy credibility: markets have recognized and priced Israel’s fiscal and monetary credentials.
- Banking sector: banks and supervisory arrangements are robust.
- Growth profile: growth characterized as strong, sustained, and balanced.
- Public debt: reduced to about 80 percent of GDP but still vulnerable.
- Financial markets: domestic securities prices followed international declines; provident funds experienced outflows.
- Credit conditions: flows in domestic credit markets remained largely undisturbed despite international developments.
Risks and vulnerabilities
- Public debt vulnerability: although reduced to about 80 percent of GDP, public debt remains a source of concern.
- External market spillovers: domestic securities prices moved with international markets, causing outflows from provident funds.
- Potential transmission: despite outflows from provident funds, domestic credit markets had not shown significant disruption as of the report.
Policy implications and recommendations (as implied by findings)
- Maintain fiscal and monetary policy credibility to anchor markets and preserve investor confidence.
- Continue robust banking supervision to sustain resilience of the financial sector.
- Monitor public debt dynamics closely given vulnerability at about 80 percent of GDP.
- Track domestic financial market developments (including provident fund flows) for signs of transmission to credit markets and real activity.
Subject and keyword highlights
- Subject: Banking, Budget planning and preparation, Corporate bonds, Credit, Fiscal policy, Inflation, Money, Prices, Public debt, Public financial management (PFM)
- Keywords: break-even inflation, budget deficit, Budget planning and preparation, central bank, consultation cycle, CR, Credit, Global, IIP structure, Inflation, interest rate, ISCR, Israeli economy, resident Representative
Israel: 2008 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Israel. February 17, 2009.
Content in this bundle
- Competitiveness and the Equilibrium Real Exchange Rate