Israel Economic Activity March 2021

Israel: Composite State of the Economy Index growth remains broadly stable in March

The Bank of Israel’s Composite State of the Economy Index increased 0.50% in month-on-month seasonally-adjusted terms in March, which was above February’s 0.45% increase and was driven by the lifting of most lockdown restrictions. The index was positively influenced by consumer goods imports in March, and retail sales revenue in February. 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 rebounded, rising 1.5% in March (February: -0.2% yoy), the best result since February 2020.

Padmasai Varanasi, economist at Oxford Economics, commented:

“We have maintained our 2021 GDP growth forecast at 4.5% after a lower-than-expected 2.3% contraction in 2020. A rapid vaccination campaign allowed economic re-opening to start from 21 February […]. But while the economy will see an initial boom in activity, a more sustained recovery is contingent upon a labour market recovery. Israel spent more days in lockdown than any other country in the world, thus pushing people into prolonged periods of unemployment that will take some time to reverse.”

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