The Israeli economy grew 3.3% in 2019, slightly higher than the forecast, the Central Bureau of Statistics reported today in its preliminary estimate for GDP, compared with 3.4% growth in 2018 and 3.6% in 2017.
The Central Bureau of Statistics also reported that the budget deficit of the government and the National Insurance Institute was NIS 50 billion, 3.54% of GDP. The method used by the Central Bureau of Statistics to calculate the deficit differs slightly from the method used by the Ministry of Finance. For example, the Central Bureau of Statistic calculated the government budget deficit last year at 3.19%, compared with 2.9% for the Ministry of Finance. The deficit in the broader government sector, which includes the local authorities, national institutions, and public non-profit associations, such as institutions of higher education, reached NIS 55 billion in 2019, 4%, compared with 3.6% in 2018.
The composition of growth in 2019 was similar to that in 2018 in most categories, except for an alarming drop in investment in fixed assets, which grew by only 0.3% in 2019, compared with 4.8% in 2018. Purchases of machinery and equipment plummeted, indicating a slowdown in economic activity in the production sector.
Exports of goods and services were up 3.3% in 2019, after rising 5.6% in 2018 and 4.1% in 2017. Revenue from exports of tourist services grew 3.3%, following a 5.3% increase in 2018. Exports of services, excluding tourism and startups, which consists mostly of software and research services, jumped 9.2%, after climbing 9.9% in 2018. Diamond exports plunged 25.1%, while agricultural exports were up 2%. Imports of goods and services rose 3.4% in fixed prices, following increases of 6.4% in 2018 and 4.9% in 2017.
Figures for Israel's trade and capital flow show an increase in the surplus, which supports further strengthening of the shekel against foreign currencies. Israel had a $9.8 billion trade surplus in 2019, compared with a $4 billion surplus in 2018. The balance of payments current account had a $14.8 billion surplus in 2019, compared with a $9.5 billion surplus in 2018. The current account surplus amounted to 3.7% of GDP in 2019, compared with 2.6% of GDP in 2018.
Published by Globes, Israel business news - en.globes.co.il - on December 31, 2019
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