Recovering
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Analysts: Market showed 2.1% growth in Q3
Economy's recovery attributed to rise in private consumption, exports; trend likely to result in 2.7% taxation increase
The Israeli market is quickly putting the recession behind it, with a 2.1% growth in the third quarter of 2009, financial sources said Sunday.
The growth is attributed to a rapid increase in private consumption and exports. The data is encouraging: The year's second quarter noted a moderate 0.8% growth, Q1 had a negative growth rate and so did the last quarter of 2008.
The Central Bureau of Statistics will publish official growth predictions in two weeks time.
According to the data so far, the market's growth is likely to translate into higher taxation, which may increase by up to 2.7% than originally predicted and will, in turn, decrease the national deficit by 5.5%. The deficit target was set at 6% - an approximate NIS 45 billion (about $12 billion).
Further data indicates that housing prices have increased over the past several months, but senior government analysts said the figures do not necessarily indicate Israel is facing a real estate "bubble."
Financial sources in Jerusalem said that the market would see an increase in actual inflation, which will cause it to exceed the government's 1%-3% inflation target.
The Bank of Israel is also expected to raise interest rates to 1% by the end of 2009.
