The International Monetary Fund said that Israel's economy grew by 4.7 percent in 2011, more than double the average for members of the OECD group of developed countries, AFP reported.

But in its latest report on the Israeli economy, the IMF also said the Jewish state had one of the highest levels of poverty among the 35 members of the Organisation for Economic Cooperation and Development, largely due to high unemployment among Arab-Israelis and ultra-Orthodox Haredi Jews.

"Directors emphasised macro-social concerns, notably that labour participation among the Arab-Israeli and Haredi populations is low, with adverse effects on growth prospects, poverty reduction, and fiscal sustainability," it said. "They welcomed recent reforms to address these concerns, while emphasising that more is needed," it added.

Last week the Israeli cabinet approved a slew of measures aimed at lowering housing prices, as part of an economic reform package following last year's wave of social protest against the cost of living.

The government will also raise the limit on rental assistance it provides to people eligible for public housing, and double the property tax on apartments that are uninhabited, a move expected to free another 15,000 apartments per year in demand areas.

The moves spring from recommendations by a government-appointed committee commissioned after Israelis took to the streets in record-breaking numbers last summer.

IMF report saw 2012 growth for Israel falling to 2.8 percent, in line with the OECD's average forecast for its members.