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Economy

A growth strategy for the Israeli economy – Brookings Institution

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EXECUTIVE SUMMARY

Annual economic growth in Israel of 3.5% over the past decade has largely been the result of an increase in employment rates, while the growth rate in productivity has been very low. The rates of employment cannot continue to grow at this rate in the future due to the expected saturation in employment rates among the non-ultra-Orthodox Jewish population. Even the achievement of optimistic employment goals among sectors with currently low participation rates will not prevent a drop in GDP growth to a historically low level of only 2.3% per year. Israel’s GDP per capita is not catching up to that of comparable OECD countries and the gap has remained unchanged for more than 40 years. Without reforms to increase the productivity growth rate, Israel’s relative GDP per capita is expected to deteriorate.

This paper presents a macroeconomic analysis of the sources of the productivity gap — in terms of output per-hour of work — between Israel and a group of seven comparable OECD (Organisation for Economic Co-operation and Development) economies. The analysis points to three main policy related factors that potentially explain the existing gap: (1) low levels of public investment and capital stock, in particular in transportation infrastructure and information and communications technology (ICT) infrastructure; (2) shortage of human capital, primarily among individuals who do not obtain academic education; and (3) heavy regulatory and bureaucratic burden on the business sector.

The goal of this policy paper is to propose a comprehensive economic strategy for the Israeli economy, backed up by a methodological framework based on the economy’s strengths and weakness, including a description of the areas that are in need of specific and implementable programs and continuous measurement of progress. We are proposing a strategy to deal with the main factors that can be influenced by government action and which have an effect on the productivity gap between Israel and the benchmark OECD economies. The vision is to bring the levels of the factors of production up to those in the benchmark economies, including investment in public infrastructure, and in particular transportation infrastructure and ICT infrastructure; improvement in human capital by establishing a post-secondary vocational education and training (VET) system, in parallel to the academic system; and the stimulation of the business sector through the reduction in the bureaucratic and wasteful regulatory burden.

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Economy

September merchandise trade deficit narrows to $1.3 billion: Statistics Canada

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OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.

The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.

Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.

Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.

Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.

In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.

This report by The Canadian Press was first published Nov. 5, 2024.

The Canadian Press. All rights reserved.

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Economy

How will the U.S. election impact the Canadian economy? – BNN Bloomberg

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How will the U.S. election impact the Canadian economy?  BNN Bloomberg

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Economy

Trump and Musk promise economic 'hardship' — and voters are noticing – MSNBC

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Trump and Musk promise economic ‘hardship’ — and voters are noticing  MSNBC

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