IMF ups Israel growth forecast

The latest World Economic Outlook projects negative inflation for Israel this year too, of -0.1%.

The IMF has raised its growth outlook for Israel by 0.3 percentage points in a new World Economic Outlook report published today, on the eve of the World Bank Group and IMF 2007 Annual Meeting.

In the Article IV consultation with Israel, published on January 23, the IMF predicted 4.5% growth. It now predicts 4.8% growth in 2007, and 4.2% growth in 2008. The IMF’s growth forecast for Israel is one of the highest for developed countries; the IMF categorizes Israel as such.

The IMF predicts higher growth rates in 2007 for Hong Kong and Singapore, at 5.5% each, and for Ireland, at 5%. It predicts 4.4% growth for South Korean, 2.9% growth for the UK, 2.3% for Japan, 2.2% for the US, and 1.8% for Germany.

The IMF also predicts 0.1% deflation for Israel this year; the only developed country for which it predicts this. The IMF projects that Israeli inflation will only reach the government’s inflation target midpoint of 2% in 2008. For the sake of comparison’s the IMF average inflation rate for developed countries in 2007 is 1.8%.

The IMF predicts that Israel’s unemployment rate will fall to 7.5% of the civilian labor force in 2007 and 7.2% in 2008, down from 9% in 2005 and 8.4% in 2006. Israel’s unemployment rate is still among the highest among developed countries; only Germany, France, Spain, Belgium, and Greece are projected to have higher rates.

Published by Globes [online], Israel business news - www.globes.co.il - on April 11, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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