The growth rate was higher than expected in the wake of the second Lebanon war.
Economic growth reached 5% in 2006, 0.5% higher than the October estimate of 4.5% in the wake of the second Lebanon war. The war caused an estimated 0.3% loss in GDP.
However, economic growth slowed to an annualized 2.9% in the second half of the year, compared with 5.9% in the first half. Business sector product rose by more than 6.3% and industrial product rose by 8.2%, meaning that growth in 2006 was weighted towards manufacturing.
GDP per capita rose by more than 3% and the standard of living rose by 2.8%. Total domestic consumption grew by 4.6%, while defense-related consumption rose by 5.7% because of the war.
Israel will end 2006 with a balance of payments surplus of $3.9 billion. In addition, exports exceeded imports for the first time in the history of the state.
Published by Globes [online], Israel business news - www.globes.co.il - on December 31, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006