Israel's GDP growth slows to 1 pct in Q2: report

Source: Xinhua| 2019-08-18 20:57:11|Editor: xuxin
Video PlayerClose

JERUSALEM, Aug. 18 (Xinhua) -- Israel's gross domestic product (GDP) rose at an annualized rate of only one percent in the second quarter of 2019, according to a report released on Sunday by the Israeli Central Bureau of Statistics.

This is a sharp slowdown in Israel's economy, after an annualized GDP growth rate of 4.7 percent in the first quarter of 2019, and 4.2 percent in the fourth quarter of 2018.

The sharp decline is mainly explained by a decrease in private consumption in the second quarter, which was affected by a significant decline in vehicle imports.

In the first quarter of 2019, there was a sharp increase in the vehicle section because of a change made last April in the Israeli ecotax, which raised car prices and led to mass car purchases before the change.

The data also showed that exports of Israeli goods and services, excluding start-up companies and diamonds, rose 4.6 percent in the second quarter, following an increase of 8.3 percent in the first quarter.

In addition, public consumption expenditure increased by 10 percent and imports of goods and services rose by two percent.

Some Israeli experts estimate the weak growth may cause the Bank of Israel to change its plans and lower the base interest rate which is currently 0.25 percent to return to a higher growth level.

The Central Bureau of Statistics also released that Israel's national expenditure on health in 2018 was 7.6 percent of GDP, amounting to 101.2 billion new shekels (about 28.5 billion U.S. dollars).

This is a 4.3-percent increase at constant prices compared to 2017, and a 2.3-percent increase in per capita expenditure.