Israel’s economy has come through 2009 very well – beyond expectations. It is time to say congrats to politicians, to senior bankers and to civil servants.

The IMF, finance houses, local analysts – they have all been repeating the same message for months now. Both in relation to other countries and to where it could have been, the Israeli economy is set to record healthy growth levels in 2010.

Some of the more recent stats continue to be encouraging. Unemployment has dropped to 7.7% and the pattern remains downwards. Inflation is showing signs of steadying, especially as the Bank of Israel looks set to keep raising interest rates in 2010.

No – not everything is rosy. Almost at the last moment, the Treasury has announced a 0.5% reduction in the rate of VAT, throwing businesses into confusion. Public transport will cost more from 1.1.2010. Local taxes are set to increase. And water rates will shoot up by 25% – if only they would guarantee that the extra income would improve the infrastructure!

The Middle East is notoriously unstable. Who knows if the new year will see Israel entangled in another military engagement? And yet, whether it be activities in Lebanon or in Gaza, that did not stop the local economy in the past decade.

In 2010, Israel’s stock market is set to join the Financial Times list of developed countries. The OECD is expected to accept Israel as a full member. There is a mood of quiet confidence in the financial community, and deservedly so.