According to Quest, as compared to the global economy, "Israel is doing pretty well – but not as well as it was doing."
Richard Quest is one of CNN's senior economic commentators in London, where he anchors the daily "Quest Means Business" program. He studied law at the University of Leeds, taking his degree in 1983 (Law LLB Hons.) In the past, he served as the BBC's business correspondent for 12 years.
Watch the interview with Richard Quest:
"I think you have to put it quite bluntly, that Israel is doing pretty well," Quest replied when asked what he thought about Israel's economic situation compared to the rest of the world.
"If you bear in mind that we got numbers last week from the European Central Bank that showed the eurozone will be in recession this year, we know the UK is in another year of austerity, the United States will grow maybe 2-2.2% this year – if it's lucky.
"And then you look at Israel with 3-3.5% growth, unemployment at 7% and inflation under control. I know it is not necessarily popular, because Israelis like to complain, but the fact is the core economic situation at the moment is pretty good."
'Social unrest arguments have disappeared'
Asked whether the Israelis who took to the streets in the summer of 2011 were just complaining with no real reason, Quest replied: "No, they have legitimate concern. If you raise taxes on the rich, you don't raise much money. I mean, this is one of the things that the US is doing, but it's doing it for political reasons, not for financial reasons.
"And what you saw in Israel is the middle class saying, 'Enough! We are the ones who have taken the pain of all the economic reforms and all the economic decisions.' Since then, of course, the social unrest arguments – a lot of them have largely disappeared. It would be very difficult today to get that same level of demonstrations in Tel Aviv that you saw a couple of years ago."
Quest believes that addressing the budget deficit will have to be the main economic target of the next elected government.
"What the governor (of the Bank of Israel) is worried about is the budget deficit. At 4.2% it's above target. In the new administration, or the new government, whoever is elected in January, one of their first jobs will be to address this deficit.
"You have to deal with the deficit in the good times. If you wait for the bad times, it's too late. We've seen that in Europe, we've seen that in the UK," he said.
Asked whether Israel needs the peace process in order to have a growing economy, Quest said that "no one should be under any illusion that not just a failure of the peace process, but a worsening of the security situation, does create instability.
"Markets don't like instability, investors shy away from uncertainty, and consumer confidence goes down in difficult times. So it is a very cynical, skeptical, foolish person that suggests we don't need a peace process to have a growing economy."
Amit Cotler contributed to this report