A new mall in Jerusalem
A new mall in JerusalemIsrael news photo: Flash 90

Bank of Israel Governor Prof. Stanley Fischer said at a press conference in Jerusalem Tuesday that the Israeli markets is in "relatively good" shape, whereas the world economy is in a more serious state – especially in Europe.

"We can get through this period successfully if we run the market in a responsible and orderly fashion," he said.

"The situation in the US is reasonable, not good – but there is growth and there is no danger that the US will enter a double-dip recession. In 2012, the growth expected there is 2% to 2.5%. That is not impressive but it is growth, and relatively good growth at that."

Fischer called on the government to refrain from populist steps or from reopening the budget. The budget, he warned, should not be increased. This was a thinly veiled reference to the Trajtenberg Committee appointed after the summer's "social justice" protests.

"There are some bad signs in the Israeli market and we need to be ready for all scenarios in order to avoid surprises," Fischer said. "The export of goods is going down and imports are increasing. The deficit, too, is very large. This year, we expect a current deficit of 1% product, compared to a current surplus since 2003."

"Tax revenues are down and this increases the budgetary deficit. Indirect taxes have begun to shrink, reflecting a slowdown in growth. The real estate market is starting to enter a slowdown and rent might start decreasing at a later stage."