Recent Economic Developments, 127

08/07/2010
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The Economy and Economic Activity

Recent Economic Developments, 127

Overview:

In the period reviewed, January to April 2010, Israel’s economic recovery continued in step with the recovery of the global economy. However, there were signs of some slowdown in the rate of growth compared with the growth trend at the end of 2009. Indications of the recovery could be seen in the composite state-of-the-economy index, which rose by 6.4 percent (annual rate, Figure 1.1). GDP increased at an annual rate of 3.3 percent in the first quarter of 2010, and gross domestic business sector product at a rate of 4.8 percent, with a concurrent surge in imports. This development, which derived mainly from the continued increase in domestic demand, brought the uses to their precrisis level. Gross domestic investment increased as a result of the halt in the downward trend in stocks, and private consumption, excluding durables, also grew. This increase in domestic demand was due to increased employment security, the increase in the value of the public’s assets portfolio, the low level of the interest rate, and positive expectations regarding the continued recovery of economic activity. Nonetheless, exports declined because of the slowdown in the rate of recovery in some of Israel’s export targets.

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