Karnit Flug, the Governor of the Bank of Israel, was very clear in her most recent survey. Israel’s economy is doing well.

Unemployment is well under 5%. New trade markets are being developed, as European partners continue to struggle after the credit crisis fall out. FDI investment continues to turn up.

Just look at some specific recent key-note successes: –

• Microsoft is about to rent invest around US$1 million per month in rent for new office space in Herzylia just north of Tel Aviv.
• BMW has announced plans to set up an r&d centre in the Holy Land, via its tech arm “Here”.
• Tourism in November 2016 reached an all-time high for that winter month, over 30% better than the same month last year.
• And if I had mentioned exports, Israel’s innovative approach to commerce is to allow it to tap into a US$0.25billion international distribution market for market cannabis.

On the structural side, as ever one cannot be complacent. For example, just look at my SME clientele that are swamped with needless paperwork when applying for a loan. Land prices remain high, thus ensuring that young couples are often left out of the bidding process  for homes and that office space in the big cities is hard to find. And the prices of basic food staples are driven upwards by monopolies so that the less well off stay…….less well off.

Karnit Flug has done a great job is keeping monetary policy stable, even when banks in great economic powers like Italy are struggling. That is the main role of any central bank. It is now up to the politicians in Jerusalem to rise and to meet those standards, as they determine the fiscal policy and budget for 2017. Why am I not over optimistic on this front?