OECD forecasts slow GDP growth for Israel

OECD predicts that Israel's export growth will slow from 7.5% in 2008 to 0.9% in 2009. The 2009 forecast is higher than the latest Bank of Israel prediction of 1.5% growth
 
The Organization for Economic Co-operation and Development (OECD) published last week its first growth and demand forecast for Israel. The forecast note that while Israel's GDP is not expected to suffer in 2008, in 2009 it will slow to about 2%. In the second half of 2009, however, the market will begin to pick up, and in 2010 it will recover and produce a GDP of 3.8%.
 
The 2009 forecast is higher than the latest Bank of Israel prediction of 1.5% growth. In so far as monetary policy the OECD noted that Global financial turmoil is deepening the slowdown, with the pace of economic activity not expected to  pick up substantially before the latter part of 2009.
 
The OECD added that "Monetary policy should remain biased towards easing in the near term. Further ahead, assuming a relatively trouble-free recovery from the financial crisis, the policy stance should tighten. Consideration of an increase in the fiscal spending ceiling should be put on hold in light of the increased economic uncertainty”.
 
The OECD also predicts that Israel's export growth will slow from 7.5% in 2008 to 0.9% in 2009 and will pick up to 5.2% in 2010.
 
Inflation will slow from 4.8% in 2008 to 3% in 2009 and 1.5% in 2010. The budget deficit will increase from 1.5% of GDP in 2008 to 1.9% in 2009 and go down again to 1.3% in 2010.