Israeli economy booms in fourth quarter

GDP rose by an annualized 7.8% in the fourth quarter of 2010.

Israel's GDP rose at an unprecedented pace of 7.8%,on an annualized, seasonally adjusted basis, in the fourth quarter of 2010, the Central Bureau of Statistics reported today. GDP rose by an annualized 5.4% in the second half of last year, after rising 5% in the first half, and 3.4% in the second half of 2009.

The growth rate in the fourth quarter was the fastest since 2006, when Israel fought the Second Lebanon War, after which the economy showed robust growth.

Minister of Finance Yuval Steinitz said, "The high growth rate in the second half of 2010 demonstrates the success of the government's original and responsible economic policy, including the braking and acceleration plan and the biennial budget formulated two years ago. This policy, together with a robust private sector, the Bank of Israel's cautious policy, and the industrial quiet that has been kept thanks to the economic package deal with the Histadrut (General Federation of Labor in Israel) and employers, has brought Israel nice economic achievement that stands out in comparison with most OECD member states.

"The 2011-12 budget includes strong measures to boost growth while reducing social gaps, the most noteworthy of which is extending the earned income tax credit nationwide, which gives low income-earners a substantial salary supplement from the state. Resources have also been diverted to improving education and comprehensive reform in higher education, improving infrastructures and building a network of railways and highways to the periphery, and other things. If we can maintain fiscal discipline and the cooperation of the different groups in the economy, Israel will be able to maintain this growth rate, which will be felt throughout the population."

Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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