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November 19, 2013 12:54 pm

Israel Finance Minister Lapid: 5% Yearly Growth ‘Not Out of the Question’

avatar by Zach Pontz

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Yair Lapid in 2010. Photo: Wikimedia Commons

Israel’s Finance Minister Yair Lapid downplayed concerns there could be an economic slowdown in the country, saying that an average yearly growth rate above 5% over the next decade “is not out of the question,” Globes reported Tuesday.

“Israel should strive for robust growth of more than 5% a year over the next decade,” Lapid told the Sderot Conference. “This is not out of the question; we’ve had similar numbers in the not too-distant past, but we must act in every way possible to stimulate growth.”

He recognized that weaker exports, revealed in new data released on Sunday, have impacted growth: “I know that in the last quarter exports plummeted, which caused reduced growth, but this is not a trend. Consumption and production figures are good, and we already have more up-to-date data which show that exports rose by 5% in September and by 6% in October, indicating that growth data are returning to normal.”

Numbers released Sunday showed that gross domestic product grew at a preliminary annualized rate of 2.2% in the July-September period, slowing from a revised 4.6% rate in the second quarter.

Lapid also took the opportunity to criticize Prime Minister Benjamin Netanyahu’s trickle-down economics approach.

“This Reaganomics idea from the 1980s that you should let the rich make unlimited profits and enjoy every possible tax break, and the money will then trickle down to the poor, simply doesn’t work. It failed in the U.S., it failed in the UK, and it failed in Israel,” he said.

“When the money only flows upward, it stays at the top. The money should not be at the top. We need to invest the money in the middle classes. From there, it will flow downward, and it will flow upward,” he said.

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