Bank of Israel estimates zero fourth quarter growth

The Bank of Israel estimates that GDP growth in the fourth quarter of 2008 was zero, and it predicts 1.5% growth for 2009.

If the IMF and the OECD again revise their growth forecasts for the US and EU, and the Bank of Israel may be forced to again lower its 2009 growth forecast for Israel.

At a memorial service for Amiram Sivan at Tel Aviv University yesterday, Deputy Governor of the Bank of Israel Zvi Eckstein said, "The financial crisis currently hitting the global economy finds the Israeli economy in excellent macro-economic shape. Nonetheless, cumulative information indicates a significant decline in Israel's economic activity. The worsening global crisis is directly affecting Israeli exports and the cost and amount of credit for the business sector. This is affecting private consumption and business investment. Therefore, the chances of a slowing of the growth rate have increased."

Eckstein criticized the Ministry of Finance's plan to cut the cost of credit and increase credit for businesses. "A special allocation is needed for exporters. Too little has been done too slowly so far in this area." He added that it is necessary to implement the government's recent decisions. "It is necessary to implement additional stimulus measures to minimize the effect of the crisis on the business sector as much as possible."

Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2009