Bloomberg News

Israel Economy Expanded 3.1% in 2012, Slower Than First Estimate

March 10, 2013

Israel’s economy expanded slower than previously estimated last year, as growth in exports of goods and services remained little changed.

Gross domestic product grew 3.1 percent last year, down from 4.6 percent in 2011, the Central Bureau of Statistics said in an e-mailed report. The figure compares with a preliminary estimate of 3.3 percent. In the fourth quarter, the economy expanded 2.4 percent, slower than the bureau’s 2.5 percent estimate from last month.

“Growth slowed as the year wore on,” said Alex Zabezhinsky, chief economist at DS Securities & Investments Ltd. in Tel Aviv. “It doesn’t look like things have improved this year, judging from tax receipts.”

The Bank of Israel has gradually reduced the borrowing rate from 3.25 percent in 2011 in an effort to shore up the economy amid the European debt crisis. The monetary committee held the rate at 1.75 percent last month for a second month, as rising house prices balanced slowing growth and inflation.

While growth in Israel was faster than most developed countries, the decline in growth from 2011 was greater, Zabezhinsky said. Growth in the 34 Organization for Economic Cooperation and Development countries averaged 1.4 percent in 2012, the statistics bureau said.

The halt in the flow of Egyptian gas, which forced the economy to turn to more expensive alternatives, and the week- long conflict between Israel and militants with the Gaza Strip’s ruling Hamas group in November may have also affected growth, Zabezhinsky said.

Private consumption rose by 2.7 percent last year, after rising 3.8 percent the previous year, the bureau said. Investment rose 3.6 percent, compared with 16 percent in 2011. Exports edged up 0.1 percent, compared with 5.5 percent the previous year.

To contact the reporter on this story: Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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