REPORTERNET.COM

Israel's economy is expected to grow slightly less than 3 percent in 2012, accelerating to 3.75 percent in 2013, the International Monetary Fund said on Monday, urging the government to focus on cutting public debt.

"A severe downturn in 2012 is unlikely ... but the output gap will likely reopen a little," the IMF said in its annual report on Israel, adding much depends on economic developments abroad.
Israel also needs to restrain spending on defence in 2013 and the country may have scope to cut interest rates further, the fund said.
The IMF's growth projection for this year is roughly in line with the Bank of Israel's estimate of 2.8 percent and the Finance Ministry's forecast of 3.2 percent.
Israel's economy grew 4.8 percent last year, according to preliminary official figures.
The fund said Israel needs to do more to lower its public debt burden, which is high relative to stronger developed and emerging market countries. Part of the problem stems from regional tensions and the need for high military expenses that constrain the budget.
"The top priority is to keep public debt on a downward track over the medium term. This will maintain confidence in Israel despite strained international markets, and so allow some flexibility in the deficit path in the short term," the IMF said.



(source: www.uk.reuters.com)