Report by the WTO Secretariat

Israel has not been spared the effects of the global economic crisis, but its financial system has weathered the crisis comparatively well. Since its last TPR, in 2006, real GDP growth has averaged around 5% per year, only interrupted by a sharp decline in growth in 2009. Recently, there are again signs of slowing economic activity. The resilience and stability of the financial system has been attributed, inter alia, to cautious lending and limited exposure to “toxic” assets by Israeli banks, and a conservative supervisory approach by the Bank of Israel. There was no need for any bank bailout or major stimulus programme, although the Government has substantially increased its exposure to credit guarantees in order to stimulate exports. Public debt as a percentage of GDP has been reduced (74% in 2011).