Israel's central bank chief says demographic changes such as aging and the growth of Arab and ultra-Orthodox Jewish populations are threatening the country's long-term growth prospects.

Karnit Flug said Monday that the low employment rate among ultra-Orthodox men and Arab women in particular is hindering growth. She said both segments were showing increased employment, but 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.

A separate Finance Ministry report warns that these trends could lead Israel toward Greece-style bankruptcy.