In the First Half of 2004: A rise in the Gross Domestic Product and in the Business Sector Product ; Outstanding rise in the export of goods and services ; A continuing rise in private consumption per capita
The Gross Domestic Product, in fixed prices and after seasonal adjustment, rose in the first half of 2004 at an annual rate of 4.1%, continuing a rise of 1.7% in the previous half-year, and a rise of 1.2% in the first half of last year. This rise in the GDP in the first half of 2004 reflects a rise in most uses of resources – export of goods and services, private consumption and fixed capital formation.
An analysis of development by quarters shows that in the second quarter of 2004 the GDP rose at an annual rate of 4.3%, continuing the rises of 4.9% in the first quarter and 2.3% in the last quarter of 2003.
It should be remembered that economic statistics series in Israel have been characterized by especially acute irregularity in the past three years. This situation makes it difficult to analyze developments based on seasonally adjusted series of quarterly data, and preferable to study developments by longer periods of time.
Following is an additional listing of data:
The Business Sector Product rose in the first half of 2004 at an annual rate of 5.9%, continuing rises of 2.2% in the previous half and 1.9% in the first half of 2003. This development of the business sector product in the first half of 2004 reflects rises in construction and manufacturing, and in most business services.
The total resources which were available to the economy (from the GDP and from imports), rose in the first half of 2004 at an annual rate of 7.6%, after a rise of 4.1% in the second half of 2003 – which is 5.8% higher than the resources in the first half of 2003. The rise in resources reflects a rise
an annual rate of 14.4% in the import of goods and services, which follows a rise of 10.5% in the previous half; so that imports were 12.4% higher than imports in the corresponding period of last year.
An analysis of use of resources shows that the private consumption expenditure rose at an annual rate of 3.9%, following a rise of 7.7% in the previous half, and stability in the corresponding half of 2003.
The private consumption expenditure per capita rose during the first half of 2004 at an annual rate of 2.3%, following a rise of 5.8% in the second half of 2003; which was 4.1% higher than consumption in the corresponding half of last year.
The rise in per capita consumption in the first half of this year reflects a rise of 6.7% in household expenditures on durable goods – vehicles, furniture and household equipment (refrigerators, washing machines, air conditioners, etc.). In addition, a rise of 2.3% per capita was recorded in current consumption expenditures – expenditures on food, beverages and tobacco, clothing and footwear, gasoline and electricity, and various services (education, health, entertainment, household help, etc.).
Government consumption expenditure, excluding security imports, fell in the first half of 2004 at an annual rate of 4.8%, continuing a drop of 2.8% in the second half of 2003. In the last two halves, the main reduction occurred in the local security expenditure.
Fixed capital formation (investments in residential housing, and in housing, equipment and transport vehicles) rose in the first half of 2004 by 2.9%, after a drop of 8.4% in the previous half; and was 2.9% lower than in the corresponding half of 2003.
Investments in economic activities rose by 4.55 in the first half of 2004, after dropping in the previous half (-9.4%) and in the corresponding half of last year (-1.9%). Investments in residential housing remained almost unchanged in the first half, after declines of approximately 5% in each of the two previous halves.
Export of goods and services rose in the first half of 2004 at an annual rate of 14.95, continuing a rise of 12.8% in the previous half. Exports in the first half of this year are higher by 13.9% than exports in the corresponding half of last year. The rise in exports in the first half of 2004 reflects mainly outstanding increases in industrial exports (excluding diamonds) – 28.5%, agricultural exports – 44.6%, and tourism – an annual rate of 10.2%.
Written by Mr. Aharon Blech
