The Israeli economy grew at 2.9% in the first half of 2016, according to figures published today by the Central Bureau of Statistics. Following a rather poor first quarter, the economy stepped its growth up to an annualized 3.7% clip in the second quarter. The figures show that private consumption, the economy's growth engine for the past two years, grew even faster in the first half of the year, with a 7.3% increase.
Another significant positive development was investment in fixed assets, which jumped 13% in the first half, following several quarters of underperformance. A no less significant improvement came in exports of goods and services, which climbed 4.9% in the first half of 2016, compared with the second half of 2015.
The poor export figures for the first quarter of the year gave rise to fears that the economy was on the verge of a recession. In retrospect, however, it turns out that the Central Bureau Statistics' estimates were too pessimistic; first quarter growth was 2.2%, not 0.8%, as the Central Bureau of Statistics initially reported. The figures for the first half published today are also an initial estimate.
Bank Hapoalim (TASE: POLI) lowered its 2016 economic growth forecast from 2.8% to 2.2%. The Bank of Israel followed suit a month ago by lowering its forecast to 2.4%. As of now the Ministry of Finance is sticking to a 2.8% growth forecast for the year.
Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2016
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