5.1% GDP growth in 2005

The Central Bureau of Statistics: Business product will rise by 6.4%, after rising 6.3% in 2004.

The Central Bureau of Statistics today published preliminary estimates for Israel’s economic development for 2005. It says that Israel’s economy has been growing faster than predicted. The Central Bureau of Statistics predicts 5.1% GDP growth in 2005, up from its previous estimate of 4.4%.

The Central Bureau of Statistics predicts that business product will rise by 6.4%, after rising 6.3% in 2004 -- the highest rate since the outbreak of the intifada in September 2000.

The Central Bureau of Statistics predicts 6.5% export growth in 2005, led by a 28% growth in tourism, 18% in services, and 14% in agriculture.

GDP per capita growth will be the highest since outbreak of the intifada, reaching 3.2% this year, compared with 2.5% in 2004. Israel’s standard of living will rise by 1.6% this year, half the rate last year. The rise in the standard of living is reflected by a 3.6% increase in purchases of vehicles and durable goods per capita less the 12.3% rise in 2004. Purchases of current consumer products will rise by 1.4% per capita this year, less than last year.

The unemployment rate is falling, and is expected to fall to below 9% by the end of the year, amounting to 206,000 unemployed.

Investment in the economy is stagnating. Investment in fixed assets will rise by 0.3% this year, despite preliminary signs of recovery during the second quarter. Investment in residential construction is still going down: it is expected to fall another 3.1% this year, after falling 5.7% in 2004. Investment in economic sectors (growth generators) is expected to grow by 1.5% this year, after rising 2% last year.

Imports will rise by 4.4% this year, a third of last year’s 12% growth. Civilian imports, excluding defense imports and diamonds, will rise by 4.3%, a third of last yer’s growth.

Disengagement boosted will boost public spending by 4.3% this year, compared with a 2.4% drop in 2004. Excluding disengagement and defense imports, public spending will rise by 2.8% this year.

Use of domestic resources will rise by 3.8% this year, and total use of resources will rise by 4.9%.

Israel’s economy, excluding start-ups, will grow by 4.9% this year, and business product, excluding start-ups, will rise by 6.2%.

Published by Globes [online], Israel business news - www.globes.co.il - on September 28, 2005

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