GDP in Israel
Israel - GDP
Q1 deceleration in GDP confirmed
Israel’s economy hit the brakes in Q1, mainly due to unfavorable base effects after a strong final quarter of 2016. In Q1 2017, GDP increased 1.4% over the previous quarter in seasonally-adjusted annualized terms (SAAR), the slowest expansion seen since Q2 2015 (Q4: +4.7% SAAR). The revised numbers published by the Central Bureau of Statistics (CBS) matched the preliminary estimate from 16 May.
Private consumption contracted 1.7% in the first quarter (previously reported: -1.6% SAAR, Q4: +1.1% SAAR), due to a large drop in the consumption of durable goods. In anticipation of an environmental tax on cars which came into force at the start of 2017, household expenditure surged last year as consumers rushed to buy vehicles, and the introduction of the tax explains the large decline in private consumption observed in the first quarter of 2017. In addition, the drop in fixed investment was revised from 5.6% in the first estimate to a decline of 3.1% in Q1, after growing 3.1% in Q4. Behind the contraction was the end of large investment projects undertaken by the tech giant Intel in 2016.
Looking at the external sector, imports declined 9.3% in the first quarter (previously reported: -8.9% SAAR), after rising 1.4% in Q4. The expected tax hike on cars gave imports a boost last year. In contrast, exports were a bright spot, growing 7.8% in Q1 (previously reported: +10.6% SAAR), though this did mark a slowdown from Q4’s 10.4% surge.
In annual terms, GDP expanded 4.0% in Q1, which was down from the 4.3% expansion reported in the fourth quarter of last year.
This year, the economy is expected to slow down as one-off effects dissipate. However, domestic demand will continue to grow at a solid pace, supported by robust private consumption thanks to a tight labor market, while soaring business confidence should translate into healthy fixed investment growth. Although exports are expected to rebound on the back of rising global trade volumes, strong imports will weigh on the external sector’s net contribution to the economy.
The Central Bank expects GDP to grow 2.8% in 2017 and 3.3% in 2018. FocusEconomics Consensus Forecast panelists foresee the economy growing 3.3% in 2017, which is unchanged from last month’s estimate. For 2018, the panel projects that the economy will expand 3.4%.
Israel - GDP Data
|Economic Growth (GDP, annual variation in %)||2.4||4.4||3.2||2.6||4.0|
5 years of economic forecasts for more than 30 economic indicators.
Israel GDP Chart
Source: Central Bureau of Statistics
|Bond Yield||1.95||-2.66 %||Aug 16|
|Exchange Rate||3.63||1.09 %||Aug 16|
|Stock Market||1,265||0.52 %||Aug 16|
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August 15, 2017
Consumer prices slipped 0.1% in July on a monthly basis, up from the previous month’s 0.7% decrease and contrasting market expectations of a 0.1% increase.
August 13, 2017
Exports recorded the second consecutive decline in July and decreased 13.4% compared to the same month last year, according to the Central Bureau of Statistics (CBS).
August 10, 2017
In July, the Central Bureau of Statistics’ (CBS) consumer confidence index fell to minus 13.1 points from minus 9.3 points in June.
July 23, 2017
The Bank of Israel’s (BoI) Composite State of the Economy index increased 0.32% on a monthly basis, which is above the previous month’s revised 0.25% growth (previously reported: +0.28% month-on-month) and indicates continued expansion of economic activity.
July 15, 2017
Consumer prices fell 0.7% in June compared to the previous month (May: +0.4% month-on-month).