OECD report: "50% of Israelis have deep concerns about their ability to finance essential expenses"

In a recent survey conducted by the Organization for Economic Cooperation and Development (OECD), Israel emerged as one of the countries with the highest rate of support for government intervention in dealing with the cost of living crisis. Among the 27 member countries of the OECD, Israel ranked fourth, with a staggering 83% of participants believing that the government should play a role in addressing the rising costs of living.

The survey, which included 27,000 participants, revealed that not only Israel but also developed countries, in general, showed broad support for government assistance in tackling the cost of living crisis, with 73% of respondents favoring such intervention.

However, despite the widespread support for government involvement, the study highlighted a troubling reality: Israel's government social spending remains significantly lower than the OECD average. With less than $7,000 per capita per year in terms of purchasing power, Israel falls short compared to the average of $11,000 among OECD countries. This places Israel in the worst quarter of the map, alongside countries like Turkey, Mexico, Poland, and Greece, where social spending is also relatively low.

Consequently, approximately 50% of Israelis who participated in the survey expressed deep concerns about their ability to finance essential expenses, including food, housing, energy, and debt repayment. The mounting worries come as inflation rates have been surging in both Israel and the United States, putting immense strain on household budgets.

Despite inflation moderating somewhat in recent months, price levels continue to rise, causing the purchasing power of consumers to erode. Moreover, the average wage in Israel has not risen at the same rate as inflation, further exacerbating financial hardships for many citizens. With interest rate increases adding to the burden of credit financing, households are experiencing higher costs for mortgages and loans needed to cover consumption and other expenses.

Notably, the "Risks That Matter" (RTM) survey, conducted biennially by the OECD, took an unexpected turn this year, with the cost of living crisis becoming the primary concern for respondents, surpassing traditional worries about health and disability.

The study underscored that the majority of respondents are in favor of government assistance in addressing the cost of living crisis and believe that it should be a top priority in the coming year. Specifically, support was strong for providing aid to vulnerable elderly individuals and low-income groups, who are particularly affected by the increasing costs.

However, a troubling statistic emerged from the survey, indicating that only a third of respondents are confident that existing government assistance programs would be sufficient if they encountered financial difficulties. This lack of trust in social safety nets highlights the need for more robust and effective measures to support citizens during challenging economic times.

Of particular concern is the growing reliance on loans as a coping mechanism for those struggling to finance their basic needs. The study revealed that 40% of vulnerable respondents feared they would need to seek loans from financial institutions, thereby increasing their debts. Such a situation poses significant risks, especially if households opt for short-term loans to meet essential expenses, particularly during periods of rising interest rates.

In conclusion, the survey results shed light on the pressing urgency for increased government intervention and social spending in Israel to alleviate the cost of living crisis and offer meaningful support to citizens grappling with economic challenges. Addressing these issues will require comprehensive strategies that prioritize the well-being of vulnerable populations and promote financial stability for all citizens.