Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon have reason to be proud as they attend the World Economic Forum in Davos, Switzerland this week: A new index that rates economies around the world ranks Israel in 25th place, right after the U.S. and Japan.
The new index takes into account a number of variables to rank the overall economic development of various countries: average per capita income; unemployment vs. participation in the workforce; fertility; public debt; poverty rate; equality; air quality; the availability of vital natural resources; foreign investments and more.
Ahead of the Davos conference, World Economic Forum economists applied the new criteria to the nations of the world. Norway topped the list, followed by Iceland, Luxembourg, Switzerland, Denmark, Sweden, the Netherlands, Ireland, Australia and Austria.
Economists are suggesting that the new model replace existing ones that measure per-capita income and growth, which are considered "quick" indices that tend to indicate countries' strength. According to the researchers, these traditional criteria do not accurately reflect a country's true economic strength, especially since the global financial crisis of 2008.
In addition to being ranked the 25th-strongest economy in the world, Israel's ratio of government debt-to-gross domestic product has dropped to 59.4%, the first time it has come in at below 60%.
In the three years in which Kahlon has served as finance minister, the ratio of government debt-to-GDP has dropped by a total 3%, or some 40 billion shekels ($12 billion). Total sovereign debt has dropped to 61% of the GDP, a decline of 2.9% since 2015, according to data published by Accountant General Roni Hizkiyahu.
Meanwhile, the Bank of Israel has published its integrated index on the Israeli economy, which showed that the economy gained 0.32% in December 2017 and grew by a total of 4% over the course of 2017.
The good news on the state of the country's coffers comes at an opportune moment, as the celebrations for Israel's 70th Independence Day this spring are projected to cost 100 million shekels ($30 million).
The Knesset Finance Committee met on Tuesday to approve the allocation of 100 million shekels to Independence Day plans from Culture and Sports Minister Miri Regev, who originally requested twice that amount.
