Port2port News Service
Apr 4, 2012
The Bank of Israel has revised its GDP growth forecast for 2012 upwards to 3.1% from its previous forecast of 2.8%.
The Bank of Israel further predicted that interest rate in Q1-2013 is expected to be 2.5%, and that Israel's Gross Domestic Product (GDP) is expected to grow by 3.5% in 2013.
The forecast for 2012 was revised slightly upward from the December forecast of 2.8%, primarily due to positive indicators of Israel's economy which have been published recently (goods imports, expectations in the survey of business trends, and services exports).
The slowdown in growth of imports is due to several factors. First, similar to previous forecasts, we expect a marked moderation in growth of import-intensive demand components (investment in industries and purchases of durable goods).
Second, depreciation of the shekel in effective-exchange-rate terms in the second half of 2011 (and gradual transmission to prices) works to make imported goods more expensive in comparison with domestic items.
The Bank of Israel further predicted that interest rate in Q1-2013 is expected to be 2.5%, and that Israel's Gross Domestic Product (GDP) is expected to grow by 3.1% in 2012 and by 3.5% in 2013.
However, the Bank further predicts that unemployment in 2012 will reach 5.8%, and that it will note a slight decrease to 5.7% in 2013.