Steinitz: I can’t promise 5% growth in coming years

Speaking at the annual Landmark Ventures Israel Dealmakers Summit, finance minister says Israel will suffer from global uncertainty.

Finance Minister Yuval Steinitz 390 (photo credit: Marc Israel Sellem)
Finance Minister Yuval Steinitz 390
(photo credit: Marc Israel Sellem)
Finance Minister Yuval Steinitz on Monday ruled out a quick return to the high economic growth of the past few years, saying Israel would suffer from the high level of global uncertainty.
“I cannot promise a continuation of 5 percent growth in the coming years,” he said at the annual Landmark Ventures Israel Dealmakers Summit in Tel Aviv. “As Europe stands on the brink of collapse, we must not ignore the fact that the Israeli economy and Israeli exporters in particular are already experiencing the effects.”
The economy grew at a rate of 4.8% in both 2010 and 2011, but preliminary estimates released last week by the Central Bureau of Statistics showed it grew at an annual rate of just 3.6% in the second half of 2011. The Finance Ministry, the Bank of Israel and the Organization of Economic Cooperation and Development estimate the economy should grow at between 2.8%-3.2% this year.
Speaking before an audience of about 1,000 business and venture-capital leaders, Steinitz said the Israeli economy would continue to grow despite the crisis. He emphasized that investments in non-financial Israeli companies rose by 35% last year. The government would continue to prioritize attracting new foreign investments, he said.
Steinitz said the government must take some of the credit for the strong interest shown by investors. The implementation of a two-year budget and the decision not to overspend sent them “a very important message,” he said.
Citibank and Barclays already operate R&D centers here, Steinitz said, and Apple is looking to open one, its first outside the United States.
He also cited a report in Globes on Sunday that the Blackstone Group, the world’s largest private-equity fund, intends to invest hundreds of millions of dollars in Israel through a joint venture with Markstone Capital Partners.