'Pessimism exaggerated'
צילום: AFP
UBS: Israeli economy to resume growth this quarter
Swiss investment bank predicts Israeli economy to grow 2.7% in 2010; GDP to drop 0.8% this year, compared to Bank of Israel estimate of 1.5% fall
Reinhardt Klaus, a chief economist at Swiss bank UBS, released a very optimistic review about the Israeli economy last week, examining the recent improvement in the economic indicators characterizing the Jewish state's economy.
Klaus' first reference was to last month's improvement in the Bank of Israel's combined index, which pointed to a 0.2% rise.
The UBS official also stressed that the pessimism among economists was exaggerated, and that they had a positive opinion about the Israeli economy, especially compared to the consensus.
The Swiss investment bank believes Israel will resume its growth on the basis of a consecutive quarterly comparison as early as this quarter. The bank's economists maintain their forecast for the domestic product, predicting a 0.8% fall in the production of goods and services in Israel, compared to the Bank of Israel's forecast of a 1.5% drop.
Klaus stressed that the 2010 forecast was for a 2.7% growth compared to an average predicted growth of 1.6% in the emerging markets, which include the State of Israel. Compared to the emerging markets, Klaus said, Israel is suffering from a number of structural problems, one of which is likely the low participation rate in the labor market.
In spite of the economic problems, the Swiss bank estimates that while the world's economies are showing first signs of stability, the Israeli economy will be able to present a bigger and faster growth which will be durable.
