Israel Economic Outlook
July 2, 2019The economy seemingly lost steam in the second quarter, after a frontloading of car purchases ahead of green tax changes boosted the first quarter’s outturn. The Central Bank’s State of the Economy Index suggests economic activity ebbed noticeably in April and May, likely in part on lower vehicle sales. A contraction in exports also played a role, amid a strong shekel and more challenging global trade environment. More positively, the labor market is in rude health: The unemployment rate dipped to a 14-month low in May, which should be supporting wage growth and domestic demand. In mid-June, GDP figures for Q1 were revised down slightly, largely on softer-than-previously-estimated expansions in private consumption, fixed investment and exports, and larger-than-estimated growth in imports. However, the overall picture was unchanged: Domestic demand powered the economy, while the external sector subtracted from growth.
Israel Economic GrowthGrowth should be brisk this year, supported by the strong labor market. Moreover, the development of the Leviathan gas field should boost investment. Rising global trade uncertainty and geopolitical tensions pose downside risks to growth. FocusEconomics analysts expect growth of 3.3% in 2019, which is unchanged from last month’s forecast, and 3.3% again in 2020.
Israel Economy Data
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|Bond Yield||1.59||-1.69 %||Jul 11|
|Exchange Rate||3.55||-0.37 %||Jul 11|
|Stock Market||1,488||-0.91 %||Jul 11|
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Israel Economic News
July 15, 2019
Consumer prices fell 0.6% in June over the prior month, contrasting May’s 0.7% increase, amid lower prices for fresh fruit and vegetables, and clothing and footwear.
July 11, 2019
Merchandise exports contracted 8.3% year-on-year in June in USD terms, coming after May’s revised 13.4% decline (previously reported: -8.5% yoy), and against a backdrop of elevated trade tensions and waning global momentum.
July 10, 2019
Confidence among Israeli households worsened from minus 9 in May to minus 14 in June.
July 8, 2019
At its 8 July meeting, the Monetary Committee of the Bank of Israel (BoI) kept the key interest rate unchanged at 0.25%. The Bank’s decision to stay put was likely driven by external downside risks to growth, domestic political uncertainty and the appreciation of the shekel since the start of 2019.
June 24, 2019
The Bank of Israel’s Composite State of the Economy Index rose 0.13% in May over the previous month, down from April’s revised 0.23% figure (previously reported: +0.28% mom).