Israel Economic Outlook
November 30, 2021
The economy lost steam in Q3, amid a surge in Covid-19 cases and the consequent tightening of restrictions. Looking at subsectors, private consumption growth slowed notably, while public spending slipped into contraction and fixed investment accelerated. However, the overall GDP slowdown was exaggerated by the effect of lower taxes on car imports—a factor which frequently distorts Israel’s national accounts figures. Turning to Q4, October’s Composite State of the Economy Index reading suggests activity is accelerating, with the services sector likely benefiting from tumbling Covid-19 cases as the vaccine booster campaign has been rolled out. However, the sudden border closure in November will be hitting tourism. In politics, the government approved the 2021 and 2022 budgets in November, averting snap elections. The budgets also contain structural reforms with the potential to boost future growth.Israel Economic Growth
The economy will grow briskly next year, supported by a recovery in tourism, improved economic ties with Gulf neighbors and a booming tech scene. Downside risks include the fractured nature of the coalition government—which could provoke political instability—as well as further conflict with Palestine and further virus mutations. FocusEconomics analysts see the economy expanding 4.5% in 2022, which is up 0.1 percentage points from last month’s forecast, before growing 3.7% in 2023.Israel Economy Data
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Israel Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 0.98 | -1.69 % | Jan 01 |
| Exchange Rate | 3.46 | -0.37 % | Dec 31 |
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Israel Economic News
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Israel: Composite State of the Economy Index picks up in October
November 25, 2021
The Bank of Israel’s Composite State of the Economy Index grew 0.25% month-on-month in seasonally-adjusted terms in October (September: 0.05% mom).
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Israel: Manufacturing PMI dips in October
November 22, 2021
The Manufacturing Purchasing Managers’ Index (PMI), produced by Bank Hapoalim and the IPLMA, came in at 55.4 in October, down from September's 58.1.
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Israel: Bank of Israel leaves rates unchanged in November
November 22, 2021
At its 22 November meeting, the Bank of Israel (BoI) left the policy rate at 0.10%.
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Israel: Economic growth weakens in Q3
November 16, 2021
GDP growth waned to 2.4% in seasonally-adjusted annualized rate terms (SAAR) in the third quarter, from 13.7% in the second quarter.
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Israel: Inflation drops in October
November 15, 2021
Consumer prices rose 0.10% in October over the previous month, coming in below September's 0.20% increase.
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