Dr. Gil Michael Befman and Yaniv Bar
02/12/2021
OECD data show that Israel’s economy stands out positively in an international comparison. Despite the slowdown in growth in the third quarter of the year (mainly due to a sharp decline in vehicle imports affecting the decline in the volume of taxation which has a negative effect on GDP), the current level of Israeli GDP is 3.3% higher than before the crisis (q4 / 2019). It should be noted that even in the examination of GDP per capita data, the performance of the Israeli economy is better compared to most countries.
The relatively good functioning of the Israeli economy since the outbreak of the crisis has occurred against a background of a number of factors, including: a relatively short period of closures and significant restrictions thanks to a relatively rapid and effective process of vaccinating the population, with Israel leading the world; A relatively high share of high-tech industries in economic activity, which continued to grow and were less affected by the crisis, alongside a relatively low share of exports of tourism services in GDP, unlike other countries (in Europe for example) which have not yet recovered from the crisis.
In this context, it should be noted that the OECD published (on 1.12.21) an update to the organization’s global macro forecasts. According to it, the Israeli economy is expected to grow by 6.3% in 2021 and 4.9% in 2022, growth rates similar to Leumi forecasts, and growth of 4% in 2023. These are high growth forecasts relative to most of the major developed countries, with the exception of France and the UK, which were hit harder than Israel in 2020 and are expected to grow slightly faster than Israel in 2021. Overall, the OECD forecasts global growth of 5.6% in 2021 and growth of 4.5% in 2022, emphasizing the various risks that could leave the global inflation environment at a relatively high level for a longer period of time than initially estimated.
More topics that came up this week:
In October, the combined index for examining the state of the economy indicated an acceleration in the rate of expansion of economic activity.
Acceleration in the rate of increase in the volume of credit card purchases in October.
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