Jun 2, 5:45 AM EDT

Israeli bank chief says growing numbers of ultra-Orthodox Jews and Arabs could hinder growth


Buy AP Photo Reprints
Multimedia
Assault on Gaza: Mapping the attacks
Gaza assault takes its toll on children
A closer look at Hamas
Latest News
Canada's new foreign minister expresses strong support for Israel during his first visit

Palestinian FIFA bid stirs uproar but also wins unlikely support in some Israeli circles

UN chief uses 65th anniversary of UN Palestinian refugee agency to appeal for new peace talks

Obama says Israel's commitment to a Palestinian state in doubt after Netanyahu remarks

Israeli bank chief says growing numbers of ultra-Orthodox Jews and Arabs could hinder growth

PHOTO GALLERY
AP Photo

Conflict in the Middle East

Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
Survey: Cities keen on 'sharing economy' but worried about safety in largely unregulated realm

US services firms saw May slowdown, pace of new orders and hiring slide

Survey finds that increasing uncertainty over financial future of Greece weighing on eurozone

Global economic watchdog warns on weak recovery as slashes forecast for US growth this year

Facing deadline, Puerto Rico's government pushes to overhaul indebted state power company

Israeli bank chief says growing numbers of ultra-Orthodox Jews and Arabs could hinder growth

India's central bank cuts key interest rate to boost growth in Asia's third largest economy

Spanish PM Rajoy trumpets drop in nation's registered unemployed following electoral defeat

US manufacturing growth picks up speed for 1st time in 6 months as orders, employment grow

After US economy's dismal Q1, here are things that could accelerate or restrain growth ahead

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

JERUSALEM (AP) -- Israel's central bank chief said Monday that demographic changes such as aging and the growth of Arab and ultra-Orthodox Jewish populations were threatening the country's long-term growth prospects and called for a continued increase in their employment.

Karnit Flug said the low employment rate among ultra-Orthodox men and Arab women in particular was hindering growth and while both segments were showing increased employment, without a drastic change Israel would suffer compared to other developed nations.

Arabs make up about 20 percent of Israel's 8 million citizens. The ultra-Orthodox are about 10 percent. Both are among the fastest-growing segments of society. The bank's demographic forecast predicts that within 50 years, Israel's non-ultra-Orthodox Jewish population will drop from the 70 percent to just 50 percent.

Ultra-Orthodox men often avoid the workforce and collect welfare stipends while continuing to study religion full time. Due to its high birthrates and unemployment, the ultra-Orthodox community is among the poorest in Israel. Ultra-Orthodox leaders insist their young men serve the nation through prayer and study, thus preserving Jewish learning and heritage. They say outside forces are putting their ancient brand of Judaism under siege and that integration into the secular military and workforce will undermine their lifestyle.

The previous government passed landmark legislation that aimed to gradually incorporate the ultra-Orthodox into the military and boost their employment figures. Now, with the insular ultra-Orthodox parties back in government, they are determined to roll back those measures.

Arabs, meanwhile, complain of poor education systems and lack of employment opportunities compared to Israeli Jews.

A separate Finance Ministry report warns that these trends could lead Israel toward Greece-style bankruptcy. The report says that if Israel fails to integrate the ultra-Orthodox and Arabs into the workforce, government revenues will increasingly lag behind spending as tax revenues shrink.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.