Israel GDP Q4 2015


Israel: Economy improves significantly in Q4

February 16, 2016

In Q4 2015, GDP increased 3.3% over the previous quarter in seasonally adjusted annualized terms (SAAR). The expansion was well above the 2.5% increase tallied in the third quarter and marked the highest reading in a year. Q4’s acceleration came on the back of a pickup in domestic demand, which more than offset the sluggish external sector.

In the fourth quarter, growth in private consumption accelerated from 2.2% in Q3 to 5.8% in Q4, which marked the best result in a year. Moreover, government expenditures jumped 14.5% in the fourth quarter, which was well above the 3.6% increase seen in the third quarter. Fixed investment also recorded an improvement in the fourth quarter and rebounded from a 0.1% contraction to a 6.8% expansion.

On the external front, exports of goods and services expanded 7.6% (Q3: +3.6% qoq SAAR). Moreover, imports improved from a 0.2% increase in Q3 to a 25.0% increase in Q4 mainly due to increased vehicles imports. As a result, the external sector’s net contribution to overall economic growth swung from plus 1.2 percentage points in Q3 to minus 5.8 percentage points in Q4.

In annual terms, GDP expanded 2.7% in Q4, which was up from the 2.5% expansion reported in third quarter.

The Central Bank expects GDP to grow 2.8% in 2016 and 3.1% in 2017. FocusEconomics Consensus Forecast panelists foresee the economy growing 3.0% in 2016, which is unchanged from last month’s estimate. For 2017, the panel projects that the economy will expand 3.3%.

Author:, Senior Economist

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Israel GDP Chart

Israel GDP Q415

Note: Year-on-year changes of GDP in %.
Source: Central Bureau of Statistics (CBS) and FocusEconomics Consensus Forecast.

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