Israelis have begun 2009 in a mood of deep pessimism. The Consumer Confidence Index fell to 63.3 points in January - a five-year low. The drop was led by a plunge in the public's assessment about the current economic situation and expectations about their personal economic situation in six month's time.
64% of the public believes that the Israeli economy is in poor shape, while only 5% believe that it is in good shape. 46% of respondents believe that the economy will worsen over the next six months, while only 16% believe that it will improve.
The Consumer Confidence Index has been indicating growing pessimism since mid-2007, following the outbreak of the sub-prime crisis in the US. The public anticipated the economic slowdown in Israel even before there were actual signs of it, and the public's initial cautious pessimism has only deepened.
The public's pessimism in January was accompanied by bleak economic forecasts about GDP growth in 2009 and the expected slip into recession. Conditions on Israeli and international capital markets also deteriorated sharply. Expectations of change following next week's elections were apparently unable to alleviate the public's gloom.
The Consumer Confidence Index is compiled by Globes Research and Kesselman and Kesselman - PricewaterhouseCoopers Israel. Analysis of the index indicates that private consumption, the main economic growth driver, will likely suffer, strengthening the pessimism about the recession.
The January 2009 Consumer Confidence Index (Hebrew only)
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009