The Israeli economy is headed for a catastrophe that will be one of the most difficult in Israel's modern history, Histadrut union leader Ofir Eini warned at a union conference. Thousands of workers may be laid off in the next several months, according to his extremely negative forecast that he said is based on conversations with leading businessmen. Bank of Israel Governor Prof. Stanley Fischer also has warned that Israel is facing "a new financial crisis."
Their views are a 180-degree reversal of rosy forecasts that continued until earlier this year. The Bank of Israel and the International Monetary Fund (IMF) had predicted that economic growth in Israel would slow down from the six percent rate in the past several years but would remain relatively strong. However, recent events have shown that Israel is not immune to the deepening financial crisis in the United States.