The IMF predicts 3.5% GDP growth for Israel in 2015, above the Bank of Israel's growth forecast of 3%. In the "World Economic Outlook" for the first half of 2014, the IMF predicts 3.2% GDP growth for Israel in 2014, down from 3.3% growth in 2013, but higher than the Bank of Israel's forecast of 3.1% growth and 2.8% growth excluding natural gas.
The IMF forecasts 1.6% inflation in Israel this year, just over the midpoint of the government's 1-3% inflation target, the same of the Bank of Israel's forecast. The IMF predicts 2% inflation in 2015; the Bank of Israel has not yet published an inflation forecast for next year.
The IMF also predicts that Israel's unemployment rate will rise to 6.7% in 2014, up from 6.4% in 2013, but that it will shrink to 6.5% in 2015. It predicts that Israel's current account surplus will fall from 2.5% of GDP in 2013 to 1.4% in 2014, and then rise to 1.7% of GDP in 2015.
"Global activity strengthened during the second half of 2013," says the IMF. "Activity is expected to improve further in 2014-15, largely on account of recovery in the advanced economies. Global growth is now projected to be slightly higher in 2014, at around 3.7%, rising to 3.9% in 2015… but downward revisions to growth forecasts in some economies highlight continued fragilities, and downside risks remain.
"In advanced economies, output gaps generally remain large and, given the risks, the monetary policy stance should stay accommodative while fiscal consolidation continues. In many emerging market and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern. Some economies may have room for monetary policy support. In many others, output is close to potential, suggesting that growth declines partly reflect structural factors or a cyclical cooling and that the main policy approach for raising growth must be to push ahead with structural reform. In some economies, there is a need to manage vulnerabilities associated with weakening credit quality and larger capital outflows."
Published by Globes [online], Israel business news - www.globes-online.com - on April 8, 2014
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