Central Bank: the war in Lebanon holds back July growth

Economic data released last week by the central bank gave the first official sign of the economic impact of the month long war in Lebanon
 
The Bank of Israel said last week that the combined index of the state of the economy rose 0.2% in July to 114.3 points, reflecting a slowing down in economic expansion. (the state of the economy index rose 0.4% in June and 0.6% in May.)
 
In a statement issued by the Central Bank it said that most of the rise in the index was due to the rise in industrial output and imports of goods components, which were "significantly offset" by a slump in exports caused by the war in the north and a drop in the commerce and services revenues component.
 
Analysis of the figures show that exports of goods fell 11.9% in July, services exports rose 1.4% and the imports component of the index rose 1.9%, following a 0.4% rise and a 2.6% drop, respectively.
 
The State of the Economy Index rose 5.5% in January-July, after rising 6.8% in 2005 and 6.7% in 2004. The index rose 2% in the second quarter of 2006, 1.9% in the first quarter, and 1.6% in the fourth quarter of 2004.
 
The bank noted however that most of the economic damage of the war in Lebanon would be reflected in the State of Economy Index for August, because the war began on July 12 and the present data only partly reflect the impact of the war.