Israel GDP Q4 2017

Israel: Economy wraps up 2017 with unexpectedly strong growth

The economy finished last year on unexpectedly strong footing, buoyed by resilient consumer spending and robust growth in services exports. Despite slowing in seasonally-adjusted annualized (SAAR) terms from the third quarter, a first estimate released by the Central Bureau of Statistics (CBS) showed that economic growth in the fourth quarter came in at a robust 3.6% (Q3: +3.9% SAAR; previously reported, Q3: +3.5% SAAR), above market analysts’ expectations of more modest 3.4% growth. Along with data releases for the second half of last year, full-year economic growth was also revised upwards to 3.3% (previously reported: +3.0%).

Household spending, which accounts more than half of total output, slowed considerably from a quarter earlier, easing to 1.3% (Q3: +6.9% SAAR) on weaker purchases of durable goods and a slump in automobile sales. Public spending, which had contracted in the previous quarter (Q3: -3.2% SAAR), contributed to growth in the fourth quarter, climbing a sharp 9.7% as full-year budgetary outlays were pushed through before year-end. On the other hand, fixed investment declined in the quarter (Q4: -5.5% SAAR; Q3: +2.3% SAAR) on weaker residential investment—which fell for a third straight quarter in part due to longer construction times and a lack of skilled labor—and a steep dip in industrial investment. That said, investment in machinery and equipment rose as the Leviathan natural gas reservoir ramped up development.

In the external sector, the continued strength of exports and a sharp deceleration of imports propelled a contribution to overall economic growth in the quarter (Q4: plus 2.2 percentage points; Q3: minus 2.9 percentage points). Exports rose 7.7% in the fourth quarter (Q3: +10.2% SAAR) on the strength of services exports—especially in the high-tech sectors—and the ongoing revival of the tourism sector. Goods exports, however, moderated significantly in the quarter. Imports, which jumped a quarter earlier (Q3: +20.5% SAAR) slowed significantly in the fourth quarter, growing a marginal 0.5%.

On an annual basis, GDP growth rose from a substantial base effect in the third quarter, to 2.9% in the October–December period from 2.2%.

Israel GDP Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest