As the IMF sees inflation in Israel reaching 2.7% this year after 2010 saw a 2.2% increase in the Consumer Price Index (CPI)
The International Monetary Fund (IMF) has downgraded its projection for Israel's economic growth in 2011 to 3.5% from the 3.9% it has estimated in October 2010.
The IMF's revised economic growth projections are a response to inflationary pressure, as the IMF sees inflation in Israel reaching 2.7% this year after 2010 saw a 2.2% increase in the Consumer Price Index (CPI).
According to the IMF, developed economies, especially European economies, still represent the greatest danger to worldwide economic recovery. Therefore, the IMF argues, broad steps must be taken quickly and determinedly to address the crisis in the euro bloc.
Nevertheless, the IMF raised its 2011 growth estimate for developed economies to 2.5%, compared to the previous prediction of 2.2%. The IMF warned that the growth rate could stay at 2.5% next year but that would not represent fast enough growth to reduce the high rate of unemployment.
Specifically, the US economy is predicted to grow by 3% this year, a sharp upward revision from the IMF's previous estimate of US economic growth of 2.3% in 2011. The IMF estimates that in 2012, the US economy will grow by 2.7%. Japan's economy is predicted to grow by 1.6% this year and increase to 1.8% next year. The IMF assesses that the euro bloc's growth rate will remain the same. Germany's projected economic growth has been revised upward from 2% to 2.2%.
