GDP growth stronger than expected

Israel's GDP grew 3.8% in the third quarter despite a 9.6% fall in exports.

The Israeli economy continues to grow rapidly. The Central Bureau of Statistics reported today that gross domestic product (GDP) grew at an annual pace of 3.8% in the third quarter of 2010 - well above the analysts' predictions of 2.5-3%. This follows 4.5% growth in the second quarter of 2010 and 3.9% growth in the first quarter.

The figures reported today are a first estimate of third quarter GDP.

The rise in GDP in the third quarter reflects a notable rise in public expenditure and investments in fixed assets. On the other hand, there was a modest rise of 1.3% in private consumption, and a 9.6% fall in exports of goods and services in the third quarter of 2010.

The 1.3% fall in private consumption means that there was a 0.5% in GDP per capita expenditure.

Business output grew 3.9% on an annualized basis in the third quarter of 2010, after climbing 5.1% in the second quarter and 4.8% in the first quarter.

Imports of goods and services fell 4.6% in the third quarter on an annualized basis after rising 5.9% in the second quarter.

The 9.6% fall in exports in the third quarter came after a 13.9% rise in the preceding quarter. The fall in exports was felt across the spectrum of goods and services. Industrial exports (excluding diamonds) were down 5% on an annualized basis in the third quarter, diamond exports were down 27.2%, tourist services were down 42.9%, agricultural exports were down 44.2%, and other services (mainly software, R&D and transport) were down 12.3%.

Published by Globes, Israel business news - www.globes-online.com - on November 16, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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