IMF sees Israel's growth rate slowing

The International Monetary Fund predicts 3.8% growth for Israel in 2013 and 3.3% in 2014.

The IMF predicts that Israel's growth rate will rise to 3.8% in 2013 from 3.4% in 2012, but will slow to 3.3% in 2014. The forecasts appear in the latest "Global Economic Outlook: Transitions and Tensions", published ahead of the IMF and World Bank's joint meeting in Washington on Thursday.

The IMF's forecast for the Israeli economy is close to, but not identical with, the forecasts by the Bank of Israel. The Bank of Israel predicts 3.6% growth in 2013 and 3.4% growth in 2014.

The growth forecast is stronger than the forecasts for Advanced Europe, the Eurozone, and the US. The IMF forecasts 1.6% growth for the US in 2013 and 2.6% growth in 2014; it forecasts 0.4% growth for the Eurozone in 2013 and 1% growth in 2014; and it forecasts 0.5% growth for Germany in 2013 and 1.4% growth in 2014.

The IMF predicts that inflation in Israel will be 1.6% in 2013 and rise to 2.1% in 2014. The Bank of Israel forecasts 1.9% inflation in 2014. For the sake of comparison, Israel's inflation rate was 1.7% in 2012.

The IMF forecasts that Israel's unemployment will be stable, at 6.8%, in 2013 and 2014, compared with 6.9% in 2012. It forecasts that Israel's current account surplus will be 2.3% of GDP in 2013 and 3% of GDP in 2014.

The IMF's forecasts for Iran indicate the huge blow from the sanctions against the country. It forecasts that Iran's GDP will shrink by 1.5% in 2013, but grow by 1.3% in 2014, and that inflation will be 42.3% in 2013 and 29% in 2014.

Published by Globes [online], Israel business news - www.globes-online.com - on October 8, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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