The latest figure for growth in the first quarter, published today by the Central Bureau of Statistics, is 1.7%. The original figure of 0.8% was later revised to 1.3%. The latest figure for Israeli exports is an annualized 5.3% decrease, compared with the previous decrease of 8% published a month ago.
Business product grew 0.8% in the first quarter, compared with the previous figure of 0.2%. Private consumption was up 5% (4.8%), and investments in fixed assets jumped 14.6% (16.2%).
The latest figures mean that concern about a possible recession has been greatly relieved, following the Central Bureau of Statistics' second revision of the growth figures. In Israel, a recession is defined as two consecutive quarters of negative per capital growth. 1.7% growth is practically the same as Israel's 1.8% population growth, meaning that per capital growth is zero, but not negative.
As reported by "Globes" two weeks ago, the revision of the growth figure is due partly to an upward revision in first quarter exports of services following the publication of the Central Bureau of Statistics' original 0.8% figure for economic growth.
Two months ago, leading economic figures were greatly concerned when the Central Bureau of Statistics announced that the economy grew only 0.8% in the first quarter. The Moody's rating agency then announced that it considered this a negative event for Israel's credit rating, and Bank Hapoalim (TASE: POLI) cut its 2016 growth forecast from 3% to 2.2%. The Bank of Israel then followed this with a downward revision of its forecast to 2.3%, while the Ministry of Finance retained its 2.7% growth forecast.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2016
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