MAI forecasts 0.8% growth in 2012

The forecast follow news that third-quarter exports plunged 17% while GDP growth has declined steadily, to 3.4% from 7.2% in fourth-quarter 2010.
 
Manufacturers Association of Israel forecast a sharp slowdown in growth and predicts other negative economic data in its report for 2012 that was published last week.
 
The Manufacturers Association sees two potential scenarios for 2012. The more optimistic scenario sees 2.7% growth and 6.4% unemployment. But the more pessimistic scenario sees the euro zone debt crisis deepening and growth in 2012 falling to just 0.8% - the same as 2009 in the wake of the global financial crisis.
The pessimistic scenario sees unemployment in Israel rising from 183,000 to 229,000 about 7%.
 
Investment in the economy would fall 13.4%, exports of goods and services will fall 2.4% and private consumption would only rise by 1.6% compared with 5% in 2010 and 2011.
 
The forecast follow news that third-quarter exports plunged 17% while GDP growth has declined steadily, to 3.4% from 7.2% in fourth-quarter 2010.
 
The retail market, purchasing of durable goods dropped 23% in the third quarter from the year-earlier period, and in the labor markets 1,300 layoffs were registered from August through November, mainly in high tech, media, advertising and financial services.
 
Faced with such data, the Treasury predicts tax returns for 2011 will be 1.8% lower than the initially predicted NIS 209.5 billion, while Bank of Israel Gov. Stanley Fischer this week said the central bank’s initial 3.2% national growth forecast for 2012 will likely have to be readjusted downward.