Israel Economic Forecast

Israel Economic Outlook

May 8, 2018

A more complete set of data suggests that the Israeli economy fared well in the first quarter, as the global economy continued to boost the external sector. Inbound tourism rose sharply in Q1, while high-tech exports rose robustly in the same period amid a rebalancing act away from pharmaceuticals. Moreover, industrial production was strong in the first two months of the year, while a pick-up in the average PMI and business confidence readings bodes well for the first quarter’s GDP reading. Recently released data from the Central Bank shows FDI in 2017 was particularly strong, with most inward investment concentrated in the technology and high-tech sectors.

Israel Economic Growth

As the Israeli economy enjoys near full employment and muted inflation, growth this year will be supported by household expenditure and fixed investment. Private consumption will also likely be supported by lower taxes, while high-tech exports should benefit from the current global economic cycle. Fixed investment should receive a boost from new projects at the Leviathan gas field and ultra-loose monetary policy. Meanwhile, regional tensions could dampen inbound tourism. Met the why particular panelists expect GDP growth of 3.4% in 2018, unchanged from last month’s forecast, and 3.3% in 2019.

Israel Economy Data

20132014201520162017
Population (million)8.18.28.48.58.7
GDP per capita (USD)36,11439,23536,82737,204-  
GDP (USD bn)291322308318-  
Economic Growth (GDP, annual variation in %)4.43.22.64.0-  
Consumption (annual variation in %)3.74.14.05.4-  
Investment (annual variation in %)4.50.00.111.3-  
Industrial Production (annual variation in %)0.51.22.21.7-  
Unemployment Rate6.35.95.34.8-  
Fiscal Balance (% of GDP)-3.1-2.7-2.1-2.1-  
Public Debt (% of GDP)65.865.262.660.5-  
Inflation Rate (CPI, annual variation in %, eop)1.8-0.2-1.0-0.2-  
Inflation Rate (CPI, annual variation in %)1.50.5-0.6-0.5-  
Policy Interest Rate (%)1.000.250.110.11-  
Exchange Rate (vs USD)3.473.893.903.85-  
Exchange Rate (vs USD, aop)3.613.583.893.84-  
Current Account (% of GDP)3.43.74.93.9-  
Current Account Balance (USD bn)9.811.915.212.4-  
Trade Balance (USD billion)-7.1-6.7-3.3-7.4-  
Exports (USD billion)63.063.856.756.2-  
Imports (USD billion)70.170.560.063.5-  
Exports (annual variation in %)2.81.2-11.8-0.9-  
Imports (annual variation in %)-0.30.5-15.25.9-  
International Reserves (USD)81.886.190.698.4-  
External Debt (% of GDP)34.829.827.927.6-  

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Israel Facts

ValueChangeDate
Bond Yield2.21-1.69 %May 21
Exchange Rate3.58-0.37 %May 21
Stock Market1,373-0.91 %May 21

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