In 2003 Finance minister, Binyamin Netanyahu, made a large cut in the welfare benefits. The result was an increase in the national growth and in employment. In 2011, the policy changed towards increasing the budget wich resulted in a decline in economic growth. The new report calls the Bank of Israel to return to the 2003 policy.
While the new finance minister (Yair Lapid) is shaping his policy, the Bank of Israel annual report for 2012 was given in. It includes very useful lessons. Quietly and without big speeches – withought admitting it explicitly either – The Bank of Israel took back some of its recommendations in the past few years regarding the micro-economic policy. After incresing the last two budgets, the 2012 report points out to the year 2003 and to Netanyahu’s policy then of cutting on expenses.