The International Monetary Fund predicts that the Israeli economy's growth rate will reach 4.8% in 2011, compared to a previous forecast of 3.8%. The 2012 growth rate forecast, however, was cut to 3.6% compared to a previous outlook of 4.8%.
The figures were published in the September edition of the organization's world outlook ahead of the IMF meeting in Washington.
Israel's inflation rate is expected to rise to 3.4% this year due to the wave of price hikes, some stemming from taxes. In 2012, inflation is expected to drop to 1.6% - within the government's target range of 1-3%.
Unemployment is expected to drop from a 6.7% average in 2010 to a 5.9% average this year and to a 5.8% average in 2012. The IMF's appears to be mistaken in this forecast, as Israel's unemployment rate has already dropped to 5.5% this year, and the average is expected to stand at 5.6% if there are no dramatic changes.
According to the report, the global economy will suffer from the renewed financial crisis in the United States and the European debt crisis. "Global activity has weakened and has become more unbalanced. Downside risks have intensified," the IMF stated.
The report cut the world growth outlook to 4% in 2011 and 2012, compared to a previous forecast of 4.5% for 2012.
Prime Minister Benjamin Netanyahu welcomed Israel's higher growth forecast, noting that "this is another expression for the government's responsible and successful management of Israel's economy, and we are committed to continue this policy."
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