Israel Economic Activity November 2021


Israel: Composite State of the Economy Index growth picks up slightly in November

December 26, 2021

The Bank of Israel’s Composite State of the Economy Index grew 0.16% in month-on-month seasonally-adjusted terms in November, which was above October's 0.13% increase. November’s reading marked the second consecutive monthly acceleration in activity, likely due to tumbling Covid-19 cases as the booster program was rolled out. However, the figures suggest the economy is still only expanding at a moderate pace, amid lingering restrictions and weak tourist arrivals.

Looking at subsectors, November’s reading was positively affected by stronger imports in the month, and by stronger service revenue and industrial production in October. 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 rose at a more moderate pace of 2.6% in November (October: +3.4% yoy).

Momentum in the final month of the year was likely dented by a renewed surge in Covid-19 cases due to Omicron, and the consequent tightening of restrictions. However, analysts at the EIU are fairly upbeat on the 2022 outlook:

“The high-technology sector will be a key driver of growth, but other industries will also gather pace. Some residual joblessness from the pandemic and intermittent disruptions from new variants will hamper some consumer-focused domestic businesses. However, pent-up demand will ensure a significant rebound and proactive pandemic management will reduce the likelihood of significant restrictions on economic activity.”

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.

Author:, Economist

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Israel Economic Activity Chart

Israel State of Economy November 2021

Note: Month-on-month and year-on-year variations in %.
Source: Bank of Israel (BoI) and FocusEconomics calculations.

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