According to the recent report of the Central Bureau of Statistics of Israel (CBS), Israel ‘s GDP in 2011 grew by 4.8% (year-o-year) which is a similar rate to the grow rate of the GDP in 2010 and much higher than the growth rate in 2009:
This estimate is based of the performance of the Israeli economy during the first three quarters of 2011: the Israeli Gross Domestic Product has expanded by 4.8% in annual terms. This is a similar growth rate to 2010, back when the Israeli GDP grew by 4.8%; in 2009 the GDP of Israel grew by 0.8%.
The chart below shows the annual growth rate of Israel’s GDP in the past years.
One of the reasons for the high growth compared with the growth rate of other leading countries’ GDP such as U.S.’s GDP growth rate of 1.8%, is due to the high population growth rate of 1.9% in 2011. As a comparison, in the U.S. the population’s growth rate was nearly 1% in 2011.
In 2011, Isreal’s GDP expanded by 3.5% during the third quarter (Q-o-Q), 3.7% in the second quarter and 4.8% in the first quarter. This means that the economic growth of the Israeli economy has diminished during the year and may end up even lower than the current expectations.
The chart below shows Israel’s GDP in recent years (in million of NIS in 2005 figures).
The private expenditure rose by 4.0% (Y-o-Y) during 2011, after it had increased by 5.3% during 2010.
Despite the high growth rate in Israeli there are still growing concerns of an economic slowdown in Israel in 2012. According to a recent publication by Bank of Israel the Israeli economy will grow by only 2.8% in 2012. There are expectations of contractions in fixed assets investments, imports, exports and private consumption in 2012 compared with 2011 growth rate. If this grim estimate is prompted by negative forecasts for the European Union, one of the leading economies that Israel has strong commercial ties.
Lior Cohen, M.A. economist and blogger at IBR and Trading NRG.
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