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Karnit Flug Photo: Gil Yochanan
Karnit Flug Photo: Gil Yochanan

Bank of Israel chief says demography a factor in national economic slowdown

Karnit Flug raises issue of high unemployment among ultra-Orthodox men and Arab women in Israel.

Associated Press
Published: 02.17.14, 13:55 / Israel Business

Israel's central bank chief says demographic changes such as aging and the larger proportion of Arabs and ultra-Orthodox Jews in society threaten the country's long-term growth prospects.



Karnit Flug spoke Monday, a day after the Central Bureau of Statistics announced that Israel's growth rate for the second half of 2013 was 2.8 percent - down from a 3.8 percent rate the previous year.


She says the low rate of employment among ultra-Orthodox men and Arab women in particular is hindering growth.


Flug says both segments are showing increased employment, but without a drastic change Israel would suffer in comparison to other developed nations.


Arabs make up about 20 percent of Israel's approximately 8 million citizens. The ultra-Orthodox are less than 10 percent. Both are among the fastest growing segments of society.


Israel has sought to address the issue of the ultra-Orthodox men, drafting a new law compelling them to perform national service instead of studying Torah, with an option of joining the workforce instead.


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