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Bank of Israel Governor Stanley Fischer
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Bank of Israel predicts recession in 2009

Annual projections revised, country said to see 0.2% negative growth rate in coming year, market to get back on track by mid 2010

Israel stands to experience a 0.2% negative growth rate in 2009, the Bank of Israel said Sunday.

 

The announcement was a revision of the bank's previous projection of a 1.5% growth. The bank predicts a market slump in the first half of 2009, followed by the market stabilizing and then resuming its growth, which according to assessments should be back on track by mid 2010.

 

The Bank of Israel revised its projection following the continuing financial crisis and several negative developments in world markets.

 

According to the brief, the Bank noted a drop in world trading projections, a decrease in Israel's financial activities and industrial exports in the last quarter of 2008, the drop in incoming tourism and the cost of Operation Cast Lead, as some of the causes for Israel's impending recession.

 

Nevertheless, the Bank foresees the improvement in external, commercial terms of trade, the drop in oil prices and the projections of an increase in public expenditures, as having a tempering affect on the negative elements.

 

The Bank of Israel also released its unemployment projection for 2009, updating it to 7.6%. The government deficit is expected to be 4% of the gross national product (GNP); but nonetheless, the national surplus is not expected remain unfazed, due to the improvement in terms of trade.

 

The Bank further said that despite the drop in individual income, its rate is still lower than experienced by other developed countries, mostly due to the good standing of the Israeli market.

 

Bank of Israel officials also hailed the banking system, as a factor moderating the drop in market growth. The banks are expected to assist the public to increase private consumption.

 

The Bank's projections for 2010 predicts a slight improvement in global economy, as well as a tempering in unemployment rates.

 


פרסום ראשון: 01.25.09, 15:31
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