Israel revises economic forecast, predicting higher growth

[Mosby]

Treasury officials are preparing bullish new estimates for economic growth this year as data coming in for the final part of 2014 and early 2015 show growth rebounding at a faster pace than anyone predicted just a few months earlier.

A final estimate is still being calculated, but Finance Ministry officials said they are now expecting Israel’s gross domestic product to expand 3.5% this year. That would mean a much faster pace of growth than the 2.8% officials were talking about last summer when they provided the first estimate ahead of the 2015 budget.

Behind the new optimism is preliminary data for the fourth quarter of 2014, which showed GDP surging ahead at a 7.2% annual rate, it fastest since the first quarter of 2008. That raised growth for all of 2014 to 2.9%.

Meantime, Israel’s unemployment rate fell to 5.9% last year from 6.2% in 2013 even as the percentage of the working age population grew to a very high 64.2%. The economy bounced back quickly from the effect of last summer’s Gaza war while a weaker shekel has been spurring higher exports, mainly to North America and Asia.

http://www.haaretz.com/business/1.645919

Beware, page has a lot of scripts or something running.

[Scootaloo]

1. Netanyahu has pulled this off nearly single-handedly

All the gains are in Israel's burgeoning ice cream industry

[King_David]

2. 'higher exports' ? WTF happened to BDS ?

[iandhr]

3. Glad you are having a sad

Over the fact that 10 people whining on a campus don't have any political power

[King_David]

4. LOL

Twelve....

[shaayecanaan]

5. If they actually believed this...

why did they cut interest rates just last month to record lows? Headline rate is currently 0.1%, even lower than the US.

I bet that will really put a rocket under the Israeli housing market, which is already frothier than champagne...

[Dick Dastardly]

6. There are many different reasons to cut rates which can occur during a strong economy, a weak

economy and an economy with mixed strengths. The same goes for raising them. It all depends on what variables are deemed to need to be controlled or responded to the most.

The WSJ and other sources said Israel cut rates for a few, reasons including weak domestic prices(stop deflationary pressure), stop the strengthening shekel and as a response to recent lowering of rates in Asia and other international economies. I also read a housing bubble could also occur as a consequence which is something you pointed out.

Israel Central Bank Cuts Benchmark Interest Rate to Record Low

Continuing price declines, shekel appreciation, lower interest rates globally, prompts move




http://www.wsj.com/articles/israel-central-bank-cuts-benchmark-interest-rate-to-record-low-1424709475

[shaayecanaan]

7. Deflation and increasing economic growth at the same time?

I think that would be a world first. We might even see hell freeze over and melt simultaneously.

Generally, if you're concerned about deflation, you're concerned about a decrease in aggregate demand, ie flagging growth.