The auspicious state of the economy is reflected in the OECD’s invitation to Israel to start the process of joining the organization, the improved credit rating granted to Israel, the agreement of the US government to continue providing us with loan guarantees, and the report of the IMF delegation that visited Israel this month.
Nevertheless, the future looks less rosy: it appears that the financial crisis in the US and Europe will become more severe. The central banks are searching for the right tools to deal with the problems of liquidity, and as a result of the difficulties in the financial markets the gaps between central banks’ interest rates and market rates are widening.