The International Monetary Fund (IMF) predicts in its annual report, that the Israeli economy will grow by only 2.5% in 2015, and hints that the budget deficit target is actually much higher than the official target in the Ministry of Finance's forecasts.
The report is based on the evaluation of a senior IMF delegation that visited Israel. According to the IMF’s economists, Israel was relatively unhurt by the global crisis of 2009 and remains a country whose open economy is well-integrated with the international economy.
The IMF economists said Israel has an advantage in its high-tech industry, which accounts for more than 40% of the country’s industrial exports. The IMF cut its prediction for Israel's economic growth in 2015 to 2.5%, down from 2.9% -- a decrease of 0.4%, and predicted that 2016 would see growth of 3%, down from 3.3%.
This translates to the lowest per capita economic growth the country has seen in recent years -- 0.5% per capita for 2015 and 1% in 2016. The IMF's growth forecast is substantially lower than the Ministry of Finance's 3.1% growth forecast, but is consistent with the negligible growth shown by figures recently published by the Central Bureau of Statistics.
However, the report also cited less positive developments. Economists warned that a continued 4% increase in housing prices each year presented a social danger. The report also noted that the income gap between the highest earners and the lowest earners in Israel was among the highest in the West.
