Bank of Israel sees strong growth for 2008

Figures published last month showed that the economy grew at an annualized rate of 5.4% in the first three months of the year
 
The Bank of Israel (BoI) raised last week its growth estimate for the economy in 2008 to 4.2%, up from the previous forecast of 3.2%, on positive economic data in the first quarter of this year and expectations that the impact of a deepening global economic slowdown on the local economy will come only in 2009.
 
The Bank of Israel also predicts that the unemployment rate will fall to 6.4%. The central bank also lowered its GDP growth forecast in 2009 to 3.1%and predicts an increase in the unemployment rate to 6.6%.
 
In its macro-economic report for 2008-2009 the BoI said that "The revised outlook for 2008 is a result of the positive data on gross domestic product and employment registered in the first quarter of this year as well as positive data from most of the developed countries”.
 
Figures published last month showed that the economy grew at an annualized rate of 5.4% in the first three months of the year. GDP growth in the January to April period was up by a rise in private consumption, exports of goods and services and investments in fixed assets.
 
In April 2008 the BoI lowered its growth outlook for this year to 3.2% from the previous projection of 3.5%, citing the slowdown in world economies, while the Finance Ministry has been sticking to its growth forecast of 4.2% for 2008 and 3.5% for 2009.