Israel’s economy below expectations in 2023-Finance Minister
2022.12.12 06:10
Israel’s economy below expectations in 2023-Finance Minister
Budrigannews.com – The Finance Ministry reduced its estimate of Israel’s economic growth from 3.5% to 3% in 2023, citing more restrained consumer and state spending. The previous two years’ rapid expansion was followed by a sharp slowdown to 3%.
More than half of Israel’s economic activity comes from consumer spending, which is expected to slow to 3.2% growth in 2023. Another important growth engine, exports, are anticipated to expand by 4.2% in 2019.
This year, growth is expected to be 6.3%, up from the ministry’s previous estimate of 4.9% in July, which was boosted by consumer spending expected to rise by 7% and an increase in exports (+11.8) and investment (+10.9%).
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According to the ministry, Israel’s economy recovered from the COVID-19 pandemic in 2021, growing by 8.6%.
It stated that inflation is anticipated to end 2022 at 5.1%, but that it will decrease to 2.7% by the end of the following year, returning to within the official annual range of 1-3% amid aggressive interest rate increases by the Bank of Israel.
The central bank has increased its benchmark interest rate from 0.1 percent in April to 3.25 percent in order to combat inflation and high living costs. It is anticipated that the rate will exceed 4%.
On January 2, the Bank of Israel will make a new interest rate decision and provide updated macroeconomic forecasts. It predicted economic growth of 6% in 2022 and 3% in 2023 in October, with inflation of 4.6 percent this year and 2.5 percent next year.
