Shlomo Maoz: Israeli economy headed for serious slowdown

"The strengthening of the shekel has reduced Israelis' competitiveness."

"Israel is headed for a real economic slowdown," Shlomo Maoz, chairman of Honline, a unit of Alpha Platinum, warned today. "Turnover in industry is falling, the level of economic activity is falling (including tourism and construction), industrial output is weak, there has been a sharp rise in the trade deficit, a drop in retail turnover, and a fall in the Bank of Israel's Composite State of the Economy Index."

Maoz added that the shekel had strengthened by 4.3% since October 2012, which he says, "Reduces the competitiveness of Israelis against the backdrop of an already difficult export market." He predicted that the Bank of Israel would ultimately cut the interest rate to 1.5%.

Maoz predicts that, within weeks, the TASE will close the 4-5% gap that has opened against foreign markets. "Bond yields in Israel will rise in view of the rise in yields in the West," he said.

As for foreign markets, "The Japanese stock market will stay strong despite the recent rise. Southeast Asia stocks will probably be hit by the depreciation of the yen," said Maoz.

Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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