The 2012 forecast was cut from 4.7% to 2.9%. The organization predicted that Israel's growth rate in 2013 would be 3.9%.
The Organization for Economic Cooperation and Development (OECD) slashed last week Israel growth forecast. According to OECD estimates, Israeli GDP will grow by 4.7% this year compared to the previous forecast from May of 5.4%.
The 2012 forecast was cut from 4.7% to 2.9%. The organization predicted that Israel's growth rate in 2013 would be 3.9%.
The OECD Economic Forecast Summary for November 2011, published on Monday, noted that despite the revised economic outlook, the Israeli economy is still in far better shape than the organization's remaining 33 members.
Its growth forecast is higher than that of the U.S. and the Euro- zone. The overall growth rate for the 34-nation bloc in 2012 is expected to be only 1.6%.
Most of Europe will grown by barely a half-percent, or even less, the group said. According to the organization's forecast, the Israeli economy will avoid recession, but the drop in outside demand will lead to a slowdown in GDP growth, which is expected to change in mid 2012.
Cutting the growth and unemployment rate forecasts, in addition to lower inflation and spending expectations, have led to a more relaxed monetary policy, the OECD stated in its latest Economic OutlookIn the report, the OECD said that “Advanced economies are slowing down and the euro area appears to be in a mild recession. Concerns about sovereign debt sustainability in the European monetary union are becoming increasingly widespread.”
Israel's unemployment rate is expected to stand at 5.6% this year, according to the OECD forecast. This rate will reach 6% in 2012, and is expected to drop to 5.8% in 2013.
