Israel bank chief targets reduction of poverty and inequality

Israeli central bank governor Karnit Flug said on Tuesday that narrowing wage disparities and reducing poverty should be primary goals of the Israeli economy. "Israel's long-term challenge is to create an inclusive growth, a broad-based sustainable growth and more equitable distribution across the society," Flug said at the Calcalist Financial Conference in Tel Aviv, in her first public appearance since she was sworn in last week as the governor of the Bank of Israel. Flug added that such growth would support also reduction of poverty and inequality. Flug forecasts that the sluggish exports trend will continue due to a slowdown in global demand and a stronger shekel. "Israeli exports stagnated in the past two years and in the recent period even declined," Flug said, adding "the appreciation of the shekel has also had an impact." Israeli economic growth rate slowed more than expected to 2.2 percent due to a sharp drop in exports, figures released by the Central Bureau of Statistics showed on Sunday. Exports account for about 34 percent of the gross domestic product (GDP) of Israel. In September, Israel's central bank cut the annual growth forecast for 2013 from 3.8 percent to 3.6 percent, adding that gas production will account for 1 percent of the GDP. The central bank 's downward revision derived primarily from the moderation in the rate of growth of public consumption in 2013, and a negative impact on exports by continued geopolitical tension.