In a new forecast for 2017 published today, <a target=new href=http://en.meitavdash.co.il/>Meitav Dash Investment House Ltd.</a> analysts predict that "the housing market will cool not only in terms of the number of transactions, but also in price." The investment house believes that different factors, such as the decline in the number of transactions, a significant rise in the number of unsold apartments, and significant hikes in mortgage interest rates are expected to moderate home prices.
<p>Earlier this week, in his weekly review, the Ministry of Finance chief economist estimated that Israel's high growth rate is not sustainable and that private consumption, which has been the main growth engine in the last few quarters, is expected to slow down. In contrast, Meitav Dash estimates that the factors supporting private consumption are not expected to change; therefore, a continued gradual rise in average wages together with a continuing low inflation environment are expected to continue supporting private consumption and GDP growth. At the same time, it is also estimated that the private consumption growth rate will decline slightly, to 5% in 2017, compared with 6% this year, mainly due to the predicted decrease in car sales and home purchases.
<p>As for monetary policy, Meitav Dash estimates that the Bank of Israel will only begin imposing monetary restraint in the third quarter of 2017; As for the foreign exchange market, they estimate that the shekel will gain against the leading currencies.
<p>The investment house estimates that Israel's GDP will grow 3.5% in 2017, compared with predicted growth of 3% this year. The key factors that will accelerate growth are the beginning of production at Intel's new fab and a rise in the export of products from the fab, and a high growth rate in service exports. At the same time, Meitav Dash's analysts state several substantial risks to Israel's economy, including a collapse in real estate prices in the case of a crisis, the rapid increase in non-residential consumer credit and the lack of room for flexibility in the Bank of Israel's monetary policy.
<p><em>Published by Globes [online], Israel business news - <a href=" http://www.globes-online.com ">www.globes-online.com</a> - on November 22, 2016</em></p> <p><em>© Copyright of Globes Publisher Itonut (1983) Ltd. 2016</em></p>