The issues that led to the outbreak of the recent demonstrations and to the formation of the Trajtenberg Committee are serious ones, and reflect serious problems in Israel’s economy. Many of the issues relate to the high cost of living. Professor Manuel Trajtenberg is an excellent economist, and he is experienced in formulating policy recommendations.
Credit quality is deteriorating rapidly. In the second quarter of this year the seasonally adjusted ratio of new bad debts to total loans rose to just under 2 per cent, from 1.6 per cent in the first quarter. The increase was especially large for loans to firms (from 2.1 to 2.6 per cent).