The Israeli economy grew at only a 1.2% pace in the first quarter of 2017, according to the revised estimate published today by the Central Bureau of Statistics. The original estimate for the quarter, published last month, was 1.4%, on an annualized basis. The revised growth figures for the third and fourth quarters of 2016 were 4.1% and 4.6%, respectively.
Growth in the first quarter was affected by a steep 72.8% annualized plunge in vehicle purchases. The Central Bureau of Statistics said today that excluding the effect of vehicle imports, GDP grew 3.1%. Spending on other consumer goods, such as refrigerators, washing machines, and air-conditioners grew by an annualized 5.7% in the first quarter, following a 2.1% annualized drop in the preceding quarter.
The economic leadership in Jerusalem can draw comfort from the sharp rise in exports of goods and services, despite the 5% shekel appreciation against foreign currencies during the first quarter.
The main changes in the estimates are a revision in the growth rate in business product from 0.6% to 0.3%. The estimate for growth in exports, on the other, was raised from 8% to 8.6%, while the estimate for the decrease in fixed assets in the first quarter was altered from 6% to only 3.4%. Imports of goods and services plunged 9.3% in the first quarter, while spending on private consumption dipped 1.7%, compared with 1.6% in the original estimate. Spending on public consumption was up 2.5%, compared with a 2.6% rise in the original estimate.
Economic research concerns in Israel and overseas are predicting 3% growth for Israel in 2017. Meitav Dash Investments Ltd. (TASE:MTDS) chief economist Alex Zabezhinsky wrote, "The figures do not reflect the complete state of economic activity; they are affected by one-time events, such as vehicle imports. There is nothing here that requires the attention of policymakers or economic forecasters."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 18, 2017
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