(IsraelNN.com) Bank of Israel head Stanley Fischer said Thursday that the worst of the worldwide financial crisis is past. “We've weathered the worst of the financial crisis; the markets are improving and the stock market is up,” Fischer told his audience at the Caesarea conference in Eilat.

The worst point in the financial crisis came during the last quarter of 2008 and the first quarter of 2009, Fischer said. Since then, stock markets have flourished, he added.

However, despite the improvements seen in the past quarter, the real effects of the financial crisis may worsen in the immediate future, Fischer warned. Unemployment may rise in the upcoming months, while negative growth is expected to continue, he said.

He estimated that the general public in Israel and around the world would begin to feel the effects of the economic turnaround by early 2010.

Fischer discussed the steps taken by the government and the Bank of Israel to deal with the crisis. The increase in value-added tax (VAT) is expected to lead to inflation in the months of July and August, he said. The Bank of Israel will determine interest levels with a goal of 1-3 percent inflation over the course of the year.

"We are weighing the threat of inflation against two of our goals: maintaining stable prices and supporting business and growth,” he explained.

While anticipating the end of the financial crisis, Fischer described the situation as very serious. The crisis will be remembered as “the most serious case of economic panic since the Second World War,” he said.

In terms of financial markets, the crisis was worse than the depressions suffered in America and parts of Europe in the 1930s, he continued. The complexity of today's markets have made the crisis more dangerous, he explained.