Israel Economic Forecast

Israel Economic Outlook

October 2, 2018

Although economic growth slowed in the second quarter, data points to solid economic momentum in the third quarter. The Central Bank’s State of the Economy Index edged up in July and the PMI readings in the first two months of the quarter trended above the average reading in the previous quarter—although the PMI did drop markedly in August on slower growth in domestic orders and output. Moreover, business confidence remained elevated in August. On the other hand, in the same month consumer confidence deteriorated on increased pessimism regarding the country’s economic situation, while exports contracted on a broad-based deterioration in foreign demand and the trade deficit widened over the same month a year ago.

Israel Economic Growth

In the second half of the year and next year, robust domestic demand should keep economic momentum afloat. A lower tax burden and still favorable financial conditions should support private consumption. Meanwhile, new gas- and oil-related projects will likely buttress fixed investment. However, regional tensions remain a downside risk to the outlook. Met the why particular Consensus Forecast panelists forecast economic growth of 3.5% this year. Next year, our panel sees the economy expanding 3.2%, which is unchanged from last month’s forecast.

Israel Economy Data

20132014201520162017
Population (million)8.18.28.48.58.7
GDP per capita (USD)36,01239,19136,78737,09241,541
GDP (USD bn)290322308317362
Economic Growth (GDP, annual variation in %)4.23.52.64.03.3
Consumption (annual variation in %)3.74.23.75.53.2
Investment (annual variation in %)3.60.8-0.811.92.7
Industrial Production (annual variation in %)0.51.22.21.73.7
Unemployment Rate6.35.95.34.84.2
Fiscal Balance (% of GDP)-3.1-2.7-2.1-2.1-2.0
Public Debt (% of GDP)66.065.362.660.759.1
Inflation Rate (CPI, annual variation in %, eop)1.8-0.2-1.0-0.20.4
Inflation Rate (CPI, annual variation in %)1.50.5-0.6-0.50.2
Policy Interest Rate (%)1.000.250.110.110.11
Exchange Rate (vs USD)3.473.893.903.853.47
Exchange Rate (vs USD, aop)3.613.583.893.843.60
Current Account (% of GDP)3.03.75.03.82.9
Current Account Balance (USD bn)8.711.915.512.011.5
Trade Balance (USD billion)-7.9-7.2-3.3-7.4-9.5
Exports (USD billion)62.463.556.756.258.0
Imports (USD billion)70.270.760.063.567.5
Exports (annual variation in %)2.21.9-11.8-0.93.3
Imports (annual variation in %)-0.20.7-15.25.96.3
International Reserves (USD)81.886.190.698.4113
External Debt (% of GDP)34.529.327.927.724.7

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Israel Facts

ValueChangeDate
Bond Yield2.46-1.69 %Oct 16
Exchange Rate3.65-0.37 %Oct 16
Stock Market1,456-0.91 %Oct 16

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