The bank expects growth to slow in 2007, while unemployment will continue to fall.
The Bank of Israel has endorsed the optimism of the Ministry of Finance and various economists, with its publication today of its latest forecast for 2006. The bank raised its growth forecast for 2006 from 4.2% to 5%. This is still less optimistic than the forecast published by the Ministry of Finance, which forecast growth of 5.3%.
The bank also warned that GDP growth is likely to slow in 2007 to 4%. The bank attributes the lower 2007 growth rate, primarily to lower business product, caused in part by manufacturing capacity reaching its maximum level.
Unemployment is likely to continue to fall gradually, to an average of 8.5% in 2006, and 8.2% in 2007.
Published by Globes [online], Israel business news - www.globes.co.il - on June 11, 2006
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