GDP in Israel
Israel - GDP
The economy gains pace in the first quarter, although temporary factors flatter the headline reading
The economy expanded 5.2% in quarter-on-quarter seasonally adjusted annualized rate (qoq SAAR) terms. The reading was considerably up from Q4’s revised 3.9% expansion (previously reported: +3.1% SAAR), although this was partly due to a surge in vehicle purchases ahead of imminent tax changes, which led to higher import tax revenue. Excluding net taxes on imports, GDP rose a more moderate—but still healthy—3.7% SAAR.
Private consumption was up 7.6% SAAR (Q4: +7.2% SAAR), partly on vehicles sales, but also likely supported by muted price pressures and a strong labor market. Fixed investment rose 10.0% (Q4: +14.2%) on greater investment in vehicles, while residential building investment declined. Government consumption rose a modest 1.2%, up from Q4’s flat reading.
On the external front, exports of goods and services bounced back (Q1: +6.2%; Q4: -4.8%), reflecting higher tourism and manufactured goods receipts. Import growth ebbed from 12.2% in Q4 to 6.7% in Q1. As a result, the external sector contracted only 0.2 percentage points from growth, down from the 5.1 percentage-point contraction in Q4.
Looking ahead, growth should be solid, albeit below Q1’s scorching pace. Low unemployment and robust wage growth should underpin private consumption. Meanwhile, fixed investment should benefit from greater policy certainty following the elections and work on the Leviathan gas field, and high-tech service exports should expand healthily.
The Bank of Israel expects GDP growth to reach 3.2% in 2019 and 3.5% in 2020. FocusEconomics panelists expect growth of 3.2% in 2019 and 3.4% in 2020.
Israel - GDP Data
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Economic Growth (GDP, annual variation in %) | 4.2 | 3.5 | 2.6 | 4.0 | 3.3 |
Israel GDP Chart
Source: Central Bureau of Statistics
Israel Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.65 | -1.69 % | Jun 20 |
| Exchange Rate | 3.58 | -0.37 % | Jun 20 |
| Stock Market | 1,464 | -0.91 % | Jun 20 |
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Economic News
Israel: Manufacturing PMI falls in May
June 17, 2019
The Purchasing Managers’ Index (PMI), produced by Bank Hapoalim and the Israeli Purchasing & Logistics Managers Association (IPLMA), fell from 51.9 in April to 50.4 in May, but remained just above the neutral 50-point mark separating contraction from expansion in the manufacturing sector. The change in the headline figure was driven by a sharp contraction in domestic orders, while export orders continued to fall.
Israel: Inflation rises in May
June 14, 2019
Consumer prices rose 0.7% in May over the prior month, up from April’s 0.3% rise, amid notably higher prices for clothing and footwear, and food.
Israel: Consumer and business sentiment decline in May
June 12, 2019
Confidence among Israeli households worsened from minus 7 in April to minus 9 in May.
Israel: Exports and imports fall sharply in May
June 12, 2019
Merchandise exports contracted 8.5% year-on-year in May in USD terms, following a revised 13.0% decline in April (previously reported: -18.0% year-on-year).
Israel: Fresh elections called after Netanyahu fails to form a coalition; economic fallout to be limited
May 30, 2019
On 29 May, MPs voted to dissolve Parliament, triggering fresh elections for 17 September, after incumbent Prime Minister Benjamin Netanyahu failed to form a coalition government.
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