The gross domestic product is expected to grow at a rate of 4% in 2010, up from April's projection of 3.7%, the Bank of Israel reported Tuesday.
The macroeconomic projections for 2010 and 2011 were updated due to the publication of economic data for the second quarter of this year as well as updated forecasts from trading around the world. The GDP for 2011 is expected to increase at a rate of 3.8%, a bit less than the previous April projection of 4%.
The unemployment rate for 2010, which sharply decline in the second quarter, is expected to reach an average annual rate of 6.3%. The surplus in current account is expected to conclude at $6.8 billion. The unemployment forecast for 2011 stands at an average annual rate of 6%
The Bank of Israel reported that the unexpectedly rapid growth for 2010 and the low unemployment rate in the second quarter point to a continued trend of a reduction in the "product gap" caused by the global economic crisis.
The rate of growth for 2011 is also expected to be lower due to a decrease in the rate of export growth, which is projected to rise at a rate of 5.8%, less than the projected rate of world trade, which stands at 7%.
The main factor expected to contribute to the drop in Israeli export rates is the projected decrease in the rate of US economic growth, which Israel's exports are especially reliant on.
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