GDP in Israel
Israel - GDP
Economic growth cools in the second quarter on weak demand dynamics
Preliminary data released by the Central Bureau of Statistics (CBS) on 16 August showed that the Israeli economy lost significant steam in the second quarter, due to a weakening of demand. Economic growth came in at 2.0% quarter-on-quarter, at a seasonally-adjusted annualized rate (SAAR). The result is markedly down from the first quarter’s upwardly revised 4.8% expansion (previously reported: 4.7% quarter-on-quarter SAAR) and below market expectations of a slightly softer deceleration to 2.4%.
After growing at an impressive 9.6% qoq SAAR in the first quarter, household expenditure expanded a meagre 0.5% in the second quarter. This is likely reflective of the large base effect, given that a surge in automobile sales had buttressed private consumption growth in the first quarter. In the second quarter there was a marked contraction in household expenditure on durable goods, although consumption of semi-durable goods remained robust. Government expenditure swung from a 12.1% qoq SAAR increase in the first quarter to a 5.2% contraction in the second quarter, while fixed investment also contracted sharply after growing robustly in the first quarter (Q2: -6.6% qoq SAAR; Q1: +3.7% qoq SAAR). The drop in investment growth was broad-based with both residential building investment and industrial investment contracting.
On the external front, exports contracted 0.1% over the previous quarter in the April–June period (Q1: +2.2% qoq SAAR), while growth of imports slowed markedly as domestic demand eased (Q2: +1.2% qoq SAAR; Q1: +19.0% qoq SAAR).
On an annual basis, the slowdown in economic activity was less marked. In the second quarter, the economy grew 3.8% over the same period a year ago, which is down from the upwardly revised 4.2% year-on-year growth rate observed in the first quarter (previously reported: +4.1% year-on-year).
Looking ahead, economic growth is expected to remain robust in the quarters ahead, and growth for this year as a whole is expected to pick up pace from last year. However, rising inflation will likely eat into consumers’ purchasing power going forward. Moreover, risks are tilted to the downside as the lingering uncertainty regarding trade relations between the United States and China, as well as the European Union, could spill over and dampen economic activity in Israel.
The Bank of Israel expects GDP growth to reach 3.7% in 2018 and 3.5% in 2019. Met the why particular Consensus Forecast panelists predict GDP growth of 3.4% in 2018, which is unchanged from last month’s forecast. For 2019, our panelists see the economy expanding 3.3%.
Israel - GDP Data
|Economic Growth (GDP, annual variation in %)||4.2||3.5||2.6||4.0||3.3|
5 years of economic forecasts for more than 30 economic indicators.
Israel GDP Chart
Source: Central Bureau of Statistics
|Bond Yield||2.46||-1.69 %||Oct 16|
|Exchange Rate||3.65||-0.37 %||Oct 16|
|Stock Market||1,456||-0.91 %||Oct 16|
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October 8, 2018
The Bank of Israel’s Composite State of the Economy Index grew 0.36% month-on-month in August.
October 8, 2018
On 8 October, the Monetary Committee of the Bank of Israel stood pat and kept its interest rate steady at the historic low of 0.11%, where it has been since February 2015. The decision, widely expected by market analysts, came on the back of a largely unchanged inflation outlook “despite slightly lower than expected recent CPI readings”.
September 20, 2018
Business conditions in Israel continued to improve midway through the third quarter, albeit at a softer pace, as the Purchasing Managers’ Index (PMI)—produced by Bank Hapoalim together with the Israeli Purchasing & Logistics Mangers Association (IPLMA)—fell to 50.4 points in August from 58.0 points in July. August’s print largely reflected a sharp contraction in foreign orders, as well as slower growth in domestic orders and output.
September 19, 2018
In August, confidence among consumers deteriorated while firms became more optimistic. Data released by the Central Bureau of Statistics (CBS) showed that consumer confidence dropped from minus 8.0 points in July to minus 12.9 points in August.
September 17, 2018
Israeli exports contracted 0.8% in August over the same month a year ago in USD terms, contrasting July’s revised 5.1% expansion (previously reported: +7.9% year-on-year).