The Finance Ministry Chief Economist describes weak second quarter growth of 2-2.5%, on an annualized basis, as a technical correction.
Israel's Ministry of Finance says there was a temporary slowdown in the country's economy in the second quarter of 2018. The assessment comes in the weekly survey of the Chief Economist of the Ministry of Finance. After three consecutive quarters in which the Israeli economy grew at an annualized rate of more than 4%, growth in the second quarter is expected to have slowed to a relatively sluggish 2-2.5%.
The main reason for the weaker growth is a reaction to the swifter than expected growth in the previous quarters. Thus for example, car imports jumped 70% from the preceding quarter and then fell sharply in the second quarter.
This is partly a technical correction, the survey's authors write, because of one-time factors that pushed up growth in the previous quarters such as car imports. Otherwise growth would be in the normative 3%-3.5% range on an annualized basis. Another worrying factor in the second quarter was a fall in private consumption.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2018
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