Israel GDP


Israel: Economy decelerates significantly in Q2

September 1, 2015

According to more detailed data, in the second quarter GDP increased 0.1% over the previous quarter in seasonally adjusted annualized terms (SAAR), which undershot the 0.3% increase reported in the first estimate. The expansion was well below the 1.8% increase tallied in the first quarter and marked the lowest reading since Q1 2009. Q2’s deceleration came mainly on the back of a slowdown in domestic demand.

In the second quarter, private consumption expanded 0.6%, which was a significant deceleration over the 5.8% increase seen in the first quarter. However, growth in government consumption held steady at Q1’s 0.4% expansion. Conversely, fixed investment contracted 3.4%, which marked a softer decrease than the previous quarter’s 8.5% drop.

On the external front, exports of goods and services contracted 10.6%, which matched the previous quarter’s drop. However, imports swung from a 3.6% expansion in Q1 to a 6.3% contraction in Q2, which marked the steepest contraction in over two years. As a result, the external sector’s net contribution to overall economic growth improved from minus 4.8 percentage points in Q1 to minus 1.3 percentage points in Q2.

In annual terms, GDP expanded 1.8% in Q2, which was down from the 2.9% expansion reported in first quarter.

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 Chart

Israel GDP Q215 0

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

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