Israel Economic Outlook
November 27, 2018The economy rapidly accelerated in the third quarter, led by firming domestic demand on rebounds in private and public consumption and strong export growth. Data for the fourth quarter, meanwhile, paints a mixed picture. The Central Bank’s State of the Economy Index edged up over the previous month in October due to robust export gains and resilient consumer goods imports. In addition, the PMI increased in the same month and indicated that business conditions in the manufacturing sector improved. On the other hand, sentiment among consumers and businesses decreased in October. Moreover, imports surged as exports expanded at a softer pace on weak demand for technological goods, resulting in a wider trade deficit. In the political arena, Prime Minister Benjamin Netanyahu narrowly dodged a government collapse following an unpopular ceasefire with Hamas in mid-November, which triggered the resignation of his defense minister. Nevertheless, the political outlook remains fragile due to the government’s one-seat majority and tensions within the coalition over the ceasefire.
Israel Economic GrowthAlthough growth in the economy is expected to moderate next year, it should nonetheless remain robust on resilient domestic demand. Private consumption will likely benefit from a lower tax burden and still-favorable financial conditions, while fixed investment should receive a boost from new gas- and oil-related projects. However, tensions in the region continue to darken the outlook. FocusEconomics Consensus Forecast panelists forecast economic growth of 3.2% in 2019, which is unchanged from last month’s forecast. In 2020, our panel sees the economy expanding 3.3%.
Israel Economy Data
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|Bond Yield||2.50||-1.69 %||Dec 11|
|Exchange Rate||3.75||-0.37 %||Dec 11|
|Stock Market||1,440||-0.91 %||Dec 11|
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Israel Economic News
Israel: Bank of Israel raises monetary policy rate for the first time in over seven years in November
November 26, 2018
On 26 November, the Monetary Committee of the Bank of Israel raised its interest rate by 15 basis points to 0.25%.
November 21, 2018
The Bank of Israel’s Composite State of the Economy Index increased 0.28% over the previous month in October, edging up from a revised 0.25% expansion in September (previously reported: +0.26% month-on-month).
November 19, 2018
The Purchasing Managers’ Index (PMI)—produced by Bank Hapoalim together with the Israeli Purchasing & Logistics Mangers Association (IPLMA)—rose to 52.7 in October from 50.0 in September.
November 18, 2018
A first estimate of national accounts data for the third quarter, released by the Central Bureau of Statistics (CBS) on 18 November, showed that the economy accelerated from Q2’s revised 1.2% quarter-on-quarter expansion at a seasonally-adjusted annualized rate (SAAR) to 2.3% in Q3.
November 15, 2018
Consumer prices rose 0.3% over the previous month in October, accelerating from September’s 0.1% increase.