Economy up by 4.9% in first half

According to revised estimates published last week by the Central Bureau of Statistics ( CBS ), the local economy grew by an annualized rate of 4.9% in the first half of 2005, following a 5.4% increase in the previous six months.
 
In the first half of 2004, the economy grew by 4.7%. The increase in the last six months reflects a boost in the exportation of goods and services, as well as an increase in private consumption. The CBS also noted that the standard of living rose 2.3% in January-June, after rising 2.2% in July-December 2004.
 
The acceleration of growth in the second quarter reflect increases in all uses of resources: exports of goods and services - 13.2%, investment in fixed assets 7.8%, and total spending on private consumption 5.3%. Public civilian consumption (excluding defense imports) rose 5%. According to the CBS, production in the second quarter of 2005 increased by an annualized rate of 5.6 percent, following an increase of 3.9 percent in the first quarter. Production increased by 6.4 percent in the last quarter of 2004.
 
Following the publication of Israel's GDP growth figure for the first half this year, Merrill Lynch the US investment house said that Israel's economic growth was broad based, suggesting that the Israeli economy was on a firmer footing. Merrill Lynch revised its growth estimate for Israel for 2005 from 3.8% to 4.2%.
 
In Britain "The Economist Intelligence Unit" (EIU) predicted that economic growth in Israel this year will reach 3.7% and 4.1% growth next year. The EIU expects that inflation in Israel will rise, but remain low.