Israel’s economy expected to grow by 3% in 2023
2023.02.16 08:23
Israel’s economy expected to grow by 3% in 2023
By Ray Johnson
Budrigannews.com – The Central Bureau of Statistics reported on Thursday that Israel’s economy expanded by 6.5 percent in 2022, which was slower than the 8.5 percent growth in 2021 but still significantly higher than that of most Western nations. This growth was attributed to solid growth in consumer spending, exports, and investment.
Following a faster-than-expected annualized 5.8% expansion in the fourth quarter, an initial estimate indicated that the reading for the entire year exceeded the 6.3% projection made by the Bank of Israel and the Finance Ministry.
In the final three months of the previous year, economists in a Reuters poll predicted growth of 2.5 percent.
The OECD nations’ average growth rate in 2022 was 2.8%.
Israel’s economy grew by 4.4 percent per capita last year, compared to the OECD average of 2.6 percent.
Israel’s population increased by 2.2 percent last year to 9.66 million, helped along by an increase in immigration from former Soviet states and a decline in mortality.
The bureau noted that Israel’s population will reach 10 million by the middle of 2024 if this rapid expansion continues. It stated that the 10 million mark will be reached by the end of the following year if it rises at a rate of 1.8%, which is more normal.
In 2023, Israel’s economy is expected to grow at a rate close to 3%, as spending is expected to be slowed by rate hikes from the central bank.
The bureau reported on Wednesday that Israel’s inflation rate increased to 5.4% in January, its highest rate since October 2008, from 5.3% in December. The strong growth data follow this report.
In an effort to control inflation, the Bank of Israel has steadily increased its benchmark interest rate from 0.1 percent in April to 3.75%. When it makes its next rate decision on Monday, policymakers are expected to raise the rate to at least 4%.
In spite of rising costs and a very high cost of living, consumer spending grew 7.5% in 2022, accounting for more than half of economic activity. Exports increased 7.9%, and investment in fixed assets increased 9.3%.
The booming high tech industry in Israel accounts for more than half of the country’s exports, employs 11% of the workforce, and contributes 15% of the country’s total economic activity.
