Israel: Composite State of the Economy Index dips in August
The Bank of Israel’s Composite State of the Economy Index dropped 0.06% month-on-month in seasonally-adjusted terms in August, following July’s 0.02% decline, amid elevated new Covid-19 cases and the reimposition of some restrictions on activity. August’s decline was driven by lower imports of consumer goods and manufacturing imports in August, and lower goods exports in July. The index is calculated using the latest available data and hence uses a combination of figures from recent months to provide a comprehensive picture of the economy’s performance.
On an annual basis, economic activity declined 3.3% in August, which was greater than July’s 3.0% fall and marked the worst result since February 2002.
Prospects for the months ahead are bleak due to the imposition of a second lockdown. On this point, Padmasai Varanasi, economist at Oxford Economics, comments:
“With the lockdown being imposed over the holiday period, the economy will suffer from dampened activity, jobs across sectors are under renewed threat as businesses close through the lockdown period and sectors such as tourism, hospitality, leisure and culture have once again come to a halt. The adverse impact on unemployment is likely to worsen.”