The Israel Central Bureau of Statistics today reported one of the largest revisions of growth statistics in a long time. According to the third estimate for the national accounts, Israeli GDP grew 2.9% on an annualized basis in the first quarter, instead of 2.1% reported in the first estimate (in seasonally adjusted fixed prices). Most of the revision was already included in the second estimate, which was 2.7%.
The almost 1% gap between the first and third reports significantly alters the former macroeconomic pessimism. The revised figures indicate a more moderate slowing of the growth rate, compared with the preceding quarter (the fourth quarter of 2013), when growth totaled 3.3%.
The Central Bureau of Statistics and Israelis in general can take comfort in the fact that the US Census Bureau had to publish an even more significant revision for the same period, but in a less pleasant direction: instead of its 0.8% initial growth estimate, its third growth estimate was -2.9%, as a result of a measuring error in calculating private consumption and exports.
Other revisions
An even more important revision published today by the Central Bureau of Statistics concerns business product, the economy's main engine. According to the first estimate, business product was up only 0.4% in the reviewed period, but rose 1.8% according to the second estimate (a substantial 1.5% difference between the two estimates). In this case also, the revision still indicates slower growth in business product, compared with a 2.5% rise (also revised upwards this month) in the fourth quarter of 2013.
The private consumption figures, which describe the standard of living, were also revised substantially: while the first estimates showed a 4% drop in per capita private consumption, the revised estimates show a much more moderate 1.8% fall in per capita private consumption. Here, too, the new figures still show that the slowdown is getting worse, but not to the extent reported two months ago.
On the other hand, the over 14% plunge in investment in fixed assets (investments in residences and the construction, equipment, and transportation sectors) was not revised, nor was the already reported troubling 4.4% drop in investment in residential construction. Despite complaints by exporters, the export figures were also upwardly revised: exports of goods and services jumped 11% in the first quarter of 2014, almost double the 6% figure reported two months ago.
Published by Globes [online], Israel business news - www.globes-online.com - on July 16, 2014
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