Respondents in a "Globes" survey predict 2.1% growth in 2004. The survey covered over 100 Tel Aviv Stock Exchange (TASE) traders.
The respondents' consensus also predicts that Israel will have the proper inflation rate of under 2% next year. The range of predictions was 3.5% to minus 0.8%, although very few traders believe there will be a second consecutive year of deflation.
The respondents' consensus predicts that following the shekel appreciation against the dollar during 2003, the shekel will gradually depreciate against the dollar in 2004 to reach NIS 4.70/$ by year-end. Extreme scenarios predict a shekel-dollar exchange rate of NIS 5.30 be year-end 2004.
In view of the low inflation and gradual shekel depreciation, the respondents' consensus predicts that Governor of the Bank of Israel David Klein will cut the interest rate to 5% by the end of 2004. Extreme scenarios predict an interest rate of 3.8%. On the other hand, some respondents fear that Klein will be forced to raise the interest rate to as much as 7% by year-end 2004.
The respondents also expressed confidence in the TASE, predicting that it will continue to generate positive returns next year. 88.6% of the respondents predict that the Tel Aviv 25 index will exceed 500 points, and 6.2% believe it will exceed 600 points - an all time high.
Published by Globes [online] - www.globes.co.il - on December 25, 2003