The Central Bureau of Statistics estimated Israel's economic growth in 2014 at 2.6%, a significant upward adjustment of its 2% forecast in November. The cause is a faster than expected recovery in various economic sectors, following Operation Protective Edge. At the same time, the figures show stagnation in exports and investments.
The figures for the national accounts published today do not include December. Final 2014 figures will be presented in March 2015.
Israel's growth rate is still higher than the 1.8% average for the members of the Organization for Economic Cooperation and Development (OECD). In per capita economic growth, however, Israel's growth was only 0.7%, lower than the 1.3% OECD average for the first time since 2008. A 3% budget deficit is projected, with 4.4% growth in revenues and 3.9% in spending. The downtrend in government debt as a proportion of GDP continued with a drop from 66.4% in 2013 to 65.5% in 2014.
Private consumption was up 3.8% in 2014, and 1.8% in per capita terms, compared with a 1.5% average in the OECD, a trend that began in 2011. Consumption of durable goods shot up 7%, due mostly to a rise in vehicle purchases, while consumption of non-durable goods rose only 1.4%. Overseas spending by Israelis jumped 6.1%.
Israel's exports of goods and services were up only 0.6% in 2014, reaching $44 billion, 21% of which was to the US. Israel's main sources of imports were the US and China. Imports of goods and services rose 0.9%: imports of goods fell, while imports of services increased.
The increase in industrial output, which accounted for 21% of business product, was a negligible 0.4%, while output in financial and technical services was up 5.8%. Investments in fixed assets decreased in 2014.
The most alarming figures were a 2.7% drop in investments in fixed assets, putting Israel at the bottom of the OECD table in this category. Investments in residential construction, which account for a third of all investments, fell 1.2%, while investments in business sectors were off 3.4%. The biggest fall in investments was in transportation vehicles (13.4%) and other construction (8.4%).
Published by Globes [online], Israel business news - www.globes-online.com - on December 31, 2014
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