Speaking to the annual general assembly of the Israel Chambers of Commerce in Tel Aviv, Bank of Israel Governor Stanley Fischer said that according to latest estimates by the central bank and Finance Ministry, the Israeli economy will grow by 4.5% this year and 4% in 2006.
Fischer noted that Israel's economy has been picking up for more than two years, thanks to domestic policies in general and to global economic growth in particular.
Israel's balance of payments is in credit as exports accelerate, while prices at home have largely remained stable.
Unemployment has fallen to about 9%, which is still relativly high, but the Central Bank believed that the proportion of the workforce out of a job will continue to decline in 2006.
Despite the general improvements in the economy Fischer noted that more economic reforms were needed, and the government's role in the economy should be reduced further.
Fischer also called on the government to pursue reform of power, energy, cargo services at the airport and oil refining.
