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Israel: Economic growth accelerates in Q4

February 16, 2015

In Q4 2014, GDP increased 6.8% over the previous quarter in seasonally adjusted annualized terms (SAAR), according to more detailed data. The expansion was slightly below the 7.2% increase reported in the preliminary estimate, but significantly overshot the 0.2% increase tallied in the previous quarter. Q4’s result marked the fastest expansion since Q1 2007. In the full year 2014, the economy grew 2.8%, which was revised down from the 2.9% expansion previously reported.

The expansion in the fourth quarter came on the back of an improvement in both domestic and external demand. Private consumption expanded 7.9% in Q4, which was up from the 5.1% increase tallied in the previous quarter. In addition, growth in government consumption jumped from 5.5% in Q3 to 8.5% in Q4. Fixed investment rebounded from a 6.1% contraction in the third quarter to a 9.9% expansion in the fourth quarter.

On the external front, exports of goods and services accelerated to a 12.7% increase in Q4, which was an improvement over the 1.3% rise seen in the third quarter. Contrary, imports contracted 2.9%, which contrasted the 14.9% increase tallied in the previous quarter. As a result, the external sector’s net contribution to overall economic growth rebounded from minus 4.6 percentage points in the third quarter to plus 5.2 percentage points in the fourth quarter, which marked the highest level in a year.

In annual terms, GDP expanded 3.3% in Q4, which was down from the 3.6% expansion reported in the preliminary estimate and was an acceleration from Q3’s 1.9% expansion.

The Central Bank expects GDP to grow 3.2% in 2015. FocusEconomics Consensus Forecast panelists foresee the economy growing 2.9% in 2015, which is unchanged from last month’s estimate. For 2016, the panel projects that the economy will expand 3.3%.


Author:, Senior Economist

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Israel GDP Q414 0

Note: Year-on-year changes of GDP in %.
Source: Central Bureau of Statistics (CBS) and FocusEconomics Consensus Forecast.


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