Several economists are expecting GDP growth figures to come in higher than consensus estimates. Israel will report its third quarter GDP figures later today.
Mizrahi Tefahot Bank (TASE:MZTF head of strategy and investments Ronen Menahem predicts "The economy grew more than 2% in the third quarter. The third quarter will be much stronger than the second quarter and figures will show strong results, primarily because of a recovery in exports."
Menahem said, "I am less optimistic with regard to investments in the business sector, because companies are waiting for more statistics which will show that the economy will recover."
Yet Menahem added, "In any case, the triangle of exports, private consumption, and government aid will push GDP higher."
Barclays Capital anlayst Daniel Hewitt said last week that he predicts Israel’s third quarter GDP growth, at 2.5%, will be above consensus as exports and imports have grown at a rapid pace in the past six months. This will be Israel's second consecutive quarter of growth.
Hewitt grouped together Poland, Israel and South Africa as emerging economies that were not hit so hard by the global recession, with GDP decline -1.5% on average. Exports, industrial production and stocks declined less for those countries than other emerging markets in the EMEA region. The analyst said that these three countries have experienced a relatively strong recovery of exports, which should lead to an acceleration of growth.
In contrast to those countries, Hewitt noted that while many EMEA economies reached the bottom of the cycle during the second and third quarters, output stabilized but has not recovered rapidly. He says, "The relatively tepid recovery in the EMEA region reflects the damage inflicted on these economies by the global recession. Balance sheets of banks, households and businesses need repairs before lending, spending, and investing can return to normal levels."
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2009
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