Israel Economic Activity September 2020


Israel: Composite State of the Economy Index improves in September, but does not yet fully capture impact of second lockdown

October 28, 2020

The Bank of Israel’s Composite State of the Economy Index increased 0.13% in month-on-month seasonally-adjusted terms in September, up from August’s 0.03% increase. September’s reading was driven by stronger exports in the month, as well as growth in industrial production in August. 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. As a result, September’s headline figure does not yet fully capture the impact of the second lockdown from 17 September, and will likely be revised down going forward.

On an annual basis, economic activity fell at a sharper rate of 3.1% in September (August: -2.9% yoy), the worst result since March 2002.

Prospects for Q4 are fairly bleak, as Padmasai Varanasi, economist at Oxford Economics, comments:

“The economy has been hit hard by the pandemic through a number of channels. With the month-long lockdown being imposed over the holiday period and a very gradual re-opening of the economy, jobs in key sectors such as tourism, hospitality, leisure and culture remain under threat.”

FocusEconomics analysts estimate the economy shrinking 5.6% in 2020, down 0.3 percentage points from last month’s forecast, before growing 4.1% in 2021, which is down 0.6 percentage points from last month’s forecast.

Author:, Economist

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Israel Economic Activity Chart

Israel State of Economy September 20 20 0

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

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