48,000 more jobs at risk

The Finance Ministry expects the economy to contract by 1% this year and reverse to a positive growth rate of 1.5% in 2010.

June 23, 2009 10:14
1 minute read.
48,000 more jobs at risk

jerusalem unemployment line 88 248. (photo credit: Ariel Jerozolimski [file])

Despite cautious optimism on the financial markets, the Israel Manufacturers Association warned Monday that 48,000 more workers will lose their jobs by the end of the year. "The business sector can no longer protect jobs and prevent layoffs," Ruby Ginel, deputy head of the association's Economics and Regulation Division, said Monday. "It needs flexible solutions funded by the state to cope with the problem of unemployment, similar to measures implemented by many countries around the world. "The rate of unemployment will rise to 9 percent by the end of the year, costing the jobs of another 48,000 workers, bringing the total number of unemployed to 276,000." Although the association supported the economic package deal struck between employers, the Histadrut Labor Federation and the government, it said it lacks the flexible employment solutions adopted in other countries. Ginel cited the funding of the fifth working day by the government as an example. "If the economic plan will be fully implemented and budgets will be allocated to boost growth-encouraging measures, the increase in the rate of unemployment can be expected to come to a halt in the first half of next year," he said. "Activating the growth engines specified in the economic package deal will add 1% to economic growth each year over the next five years." Ginel said every 1% increase in the growth rate would mean 25,000 new jobs. The Finance Ministry expects the economy to contract by 1% this year and reverse to a positive growth rate of 1.5% in 2010. Preference for Israeli companies in tenders involving governmental and municipal projects is one of the economic plan's growth-boosting measures that aims to help factories maintain production and avert layoffs, the association said. Other measures include boosting the budget of the Chief Scientist's Office to NIS 750 million, allocating NIS 900m. to encourage capital investment in the periphery and spending NIS 10 billion on infrastructure projects. In addition, the marketing and development budget for tourism will be increased by NIS 250m., and an additional NIS 300m. will be used to assist small businesses in the development of foreign trade. The government will serve as guarantor for export deals at a volume of NIS 6b., and credit conditions will improve.

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