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IMF: Israeli economy to grow 3.8% in 2013
International Monetary Fund's growth forecast higher than that of Bank of Israel, which sees 3.6% growth rate this year. In 2014, IMF expect economy to grow 3.3% while central bank predicts 3.4% growth rate
The International Monetary Fund (IMF) led by Christine Lagarde has cut the global growth forecast for the next two years amid the slowdown in the global economy's recovery.

 

As for Israel, the IMF expects the local economy to grow 3.8% this year and 3.3% in 2014. The Bank of Israel forecasts a 3.6% growth rate in 2013 and a 3.4% growth rate the following year.

 

According to the IMF, global output will expand by just 2.9% this year, down from its July estimate of 3.1%, making it the slowest year of growth since 2009. The agency sees a modest pickup next year to 3.6%.

 

Olivier Blanchard, the IMF’s chief economist, said that while growth in developed countries was gaining momentum, the growth rate in developing countries had slowed down.

 

The United States is driving much of the global recovery and US output should pick up further next year - as long as politics do not get in the way, the IMF said.

 

Blanchard warned that a failure by the US Congress to quickly raise the nation's $16.7 trillion debt ceiling could tip the world's largest economy into a deep downturn that would be felt around the globe.

 

"The effects of any failure to repay the debt would be felt right away, leading to potentially major disruptions in financial markets," he said. "It could well be that what is now a (US) recovery would turn into a recession or even worse."

 

He said, however, that such an event did not appear likely.

 

 

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