Something very strange is going on in Israel lately. On one hand, the suboptimal results of the war in the last summer left unpleasant marks on the population. The support in the Prime Minister is the lowest I can recall - many openly demand him to step down. The President is suspended because of sexual assault accusations. The minister of finances is suspended because of financial crimes accusations, and the Prime Minister himself has a few suspicions to fend off. It seems that the trust of the public in the government is quickly approaching zero.

And yet - Israel’s economics is expected to grow by almost 7% this year. The stock market is booming and is at its highest ever. The foreign investments in Israeli companies are at a peak. The unemployment rate is going down, the average wage is going up and with it the level of life. The inflation is very low, and the NIS is getting stronger against the USD and other currency. The hi-tech sector is flowering again - there are not enough employees to fill all the vacancies.

What is going on ? It seems that the economics and the general population have completely detached themselves from the governing of this country. Nothing seems to stop the high wave, not terrorist acts, not wars, not dishonest ministers. If anything is a bubble, then this is it ! However, this is not new. Rather, it is a process that has been building up in the past couple of years - less and less correlation between the geo-political situation of Israel and its financial situation. This is definitely a very unusual and curious phenomenon, perhaps worth a doctoral thesis or two in Political Science and / or Economics. Anyway, as long as the slant is positive, it is definitely good, and I hope it will continue like this…

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This entry was posted on Saturday, May 5th, 2007 at 5:17 pm and is filed under Finance, Israel. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.