Shlomo Maoz: Very good year ahead for economy

Excellence Nessuah's chief economist sees oil possibly hitting $50 and fantastic growth in Israel.

"The Israeli economy has fantastic growth. Tax revenues are rising. The government's situation is getting better as far as the deficit is concerned. Private consumption is up, as are companies' profits and investment," says Excellence Nessuah chief economist Shlomo Maoz.

Maoz added, "Exports are rising rapidly, especially for chemicals, quarries, pharmaceuticals, and processors. Interestingly for exports, there is an interesting trend of growing imports of raw materials for the basic industries, such as plastics and textiles. The last industries to see a growth in exports will see growth next year."

Moaz went on, "We're heading for a very good year for the Israeli economy, with very strong growth. I foresee an improvement in the global economy, as the world emerges from recession. Today, there is no domestic or global economy; the whole world is affected by every country.

"I foresee stable prices for oil next year. The moment when the dollar rises, the price of oil could fall to $50 per barrel. Interest rates will rise during the second half of the year, especially in the US, and maybe in Europe too, but there is no chance of seeing an interest rate hike in Japan. Interest rate hikes in the US will strengthen the dollar worldwide."

Commenting on the Israeli labor market, Maoz said, "The unemployment rate is already falling. Whereas 2009 was characterized by white-collar unemployment, we'll see a rise in high-tech investment, which will return some of the unemployed to the labor market."

As for the capital market, Maoz said, "The Tel Aviv Stock Exchange (TASE) will continue to rise, although there will be corrections on the way. We're seeing a sharp rise in worker productivity, which will boost companies' profits."

As for monetary policy, Maoz predicts, "The Bank of Israel was late in raising the interest rate, so we'll only see a rise in the returns on shekel instruments beginning in the second quarter of 2010. We'll see a sharp rise in interest rates during the second half of the year, and a drop in risk levels."

Published by Globes [online], Israel business news - - on December 21, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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