For the first time since the third quarter of 2009, the Israeli economy posted negative growth, with GDP dropping 0.4% on an annualized basis in the third quarter, as a result of Operation Protective Edge, according to figures published today by the Central Bureau of Statistics.
The fall in GDP in the third quarter follows 2.2% growth in the second quarter and 3.2% growth in the first quarter.
The decline in GDP in the third quarter reflects a decrease in investments in fixed assets and exports of goods and services, excluding diamonds and startups. Spending on private consumption and public consumption rose.
Exports of goods and services, excluding diamonds and startups, were down 4.4% in the third quarter, with exports of tourism falling by an annualized 77.5% (31.1% in quarterly terms) and industrial exports, excluding diamonds, falling 1.7%. On the other hand, exports of miscellaneous services, excluding startups, were up by an annualized 10%.
Total exports of goods and services rose by an annualized 2.8% in the third quarter, following a 13.6% drop in the preceding quarter. Exports of diamonds rose by an annualized 53.3% (11.3% in quarterly terms), while startup exports fells.
Imports of goods and services were up by an annualized 16.2% in the third quarter, following a 4.5% decline in the preceding quarter. Imports of goods and services excluding defense imports, ships, airplanes, and diamonds rose 9.8% in the third quarter, following an annualized 2.4% increase in the preceding quarter.
Spending on private consumption rose by an annualized 3.9% in the third quarter, representing a 1.8% per capita increase. The rise in spending on private consumption follows a 3.3% rise in the preceding quarter and an annualized 0.7% rise in the first quarter of 2014.
Per capita private consumption was up 17.9% in the third quarter, following a 12% rise in the preceding quarter. Spending on purchases of household equipment, such as refrigerators, washing machines, and air-conditioners, rose by an annualized 10.1%, following an annualized 35.8% rise in the preceding quarter (an 8% rise in quarterly terms). Spending on furniture and jewelry was down by an annualized 3.4%, following an annualized 1.5% increase in the preceding quarter. Spending on vehicles for private use rose by an annualized 37.3% (8.2% in quarterly terms).
Per capita spending on private consumption, excluding durable goods (food, services, clothing and footwear, medication, household expenses, and overseas travel) remained unchanged in the third quarter, after rising 2.4% in the preceding quarter. Per capita spending on consumption of services dropped 7% in the third quarter.
Annualized investment in fixed assets (investments in residences and investments in construction, equipment, and vehicles) dipped 3.6% in the third quarter, following an annualized 4.8% drop in the preceding quarter. The decrease in investments in fixed assets reflects an annualized fall of 15.5% in investment in machinery and equipment, 2.6% in investment in land vehicles, and 7.7% in investment in non-residential construction and other construction work.
Annualized investment in residential construction was off 2.1% in the third quarter, following a 2.3% drop in the second quarter and a 2% drop in the first quarter of 2014.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2014
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