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October 11, 2012 12:35 pm

Fischer: Iranian Threat Has Little Effect on Israeli Economy

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Stanley Fischer, Governor of the Central Bank of Israel. Photo: wiki commons.

At a press conference in Tokyo on Thursday for the annual World Bank-IMF meeting, Israeli central bank head Stanley Fischer said that security threats, including the possibility of a conflict with Iran, have a small effect on Israel’s economy, which he called “good but not in excellent shape.”

“I’m frequently asked about the influence of the security situation on the economy including the tension with Iran,” Fischer said. “There is a certain effect felt in the stock market in a particular way, but my feeling is that if there is an impact, then it is small.”

Fischer noted that while Israel’s unemployment level is at a healthy rate, somewhere between 6% and 7%, a global economic drop will drive Israeli exports downward and bring the country’s 2013 GDP rate of growth to 3%, which is relatively low compared to the 5% growth seen in recent years.

Regarding the Israeli economy, Fischer stated “we recovered from the global economic crisis very swiftly and we have grown at a rate of close to 5% in the past few years. This year we are in a slowdown, and we will only grow by 3.3% in 2012 and the forecast for 2013 is 3% growth. A major part of the slowdown stems from the global slowdown and a fall in exports.”

Formerly the chief economist at the World Bank, Fischer became Governor of the Bank of Israel in 2005.

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