Bank of Israel: State of Economy Index up 6.4% in 1H

Two sectors saw a relative decline in activity: tourist arrivals fell by almost 5% and new housing starts fell by 17%. Growth contributed to substantial improvement in the labor market
 
In its semiannual survey of economic developments, published last week, the Bank of Israel (BOL) noted that non-financial economic activity continued to grow during the first half of 2007.
 
In its semiannual survey the BoI said that based on the available economic data it seems that the economy is in an advanced stage of growth cycle.
 
In a detailed analysis the BoI noted that private consumption and investment were responsible for most of the growth during the first half. The State of Economy Index rose by 6.4% in first half. Retail sector was up by 4.1%, and industrial output was up by 9%.
 
Two sectors saw a relative decline in activity: tourist arrivals fell by almost 5% and new housing starts fell by 17%.
 
The growth in private consumption was, according to the BoI, mainly due to the substantial improvement in the labor market, the rise in salaries, and in employment.
 
The Bank of Israel says that almost all economic indicators point to an expansion in non-financial economic activity.
 
The BoI says that the government's deficit in 2007 will be much less than the Ministry of Finance’s ceiling target of 2.9% of GDP.
 
It is now thought that the deficit will be lower than 2% of GDP.