Godlman Sachs analyst optimistic
Goldman Sachs: Israeli economy strong
Analyst says market to remain jittery in short term, but adds Israel is in good position when it comes to global competition
Vote of confidence: Israel's economy is "much stronger than in previous years," leading to a positive economic outlook in the medium term, Goldman-Sachs investment house analyst Michael Vaknin said in response to the election results and subsequent stock market drops.
In the short run, that is the coming weeks, Vaknin estimates that the stock market will continue to be jittery.
"As long as it's not clear who will take control of the Finance Ministry, there is uncertainty over economic policies," he said.
Vaknin added that Israel is currently in a good position when it comes to global competition.
"Many good things were done in recent years regarding the liberalization of the stock market and privatization. We wouldn't want to see a situation where the privatization or reforms in the stock market would be stopped," he added.
With that, the analyst noted foreign investors are expected to be very sensitive over Israel's policies towards its national debt.
"Recently, global investment companies are displaying nervousness over markets emerging markets. We saw the markets of Turkey and Hungary suffering a blow," he said.
Negative scenario
Vaknin also provided a negative scenario that would see a higher budget as a result of a massive increase in welfare payments and pensions, which have been cut in recent years
"There is an understanding that some of the welfare policy must be changed. Netanyahu may have cut aid to segments that didn't have any opportunity to secure employment. The main question is, will there be an excess, and will these things be done responsibly," added Vaknin.
The analyst added that the Israeli government must continue to open up to international trade, which will increase Israel's attractiveness to foreign investors.
