Israel's economic output jumped an unexpected annualized 5.1 percent in the second quarter of 2013, pulling the annualized growth for the first half of the year up to 3.4%, according to data the Central Bureau of Statistics released Sunday.

The major contributors the growth were a healthy level of private consumption, which rose 6.7% in the second quarter, and government spending, which rose 8.3%. Gross Fixed Capital Formation, a measure of investment, dropped 6.3%.

Some economists have pegged an unlikely cause for the sudden spurt in growth and consumer spending: the Value Added Tax. Aware that the tax was set to rise by one percentage point in June, consumers ran out to buy products before the tax hit. Indeed, in the first half of 2013, spending on durable goods such as furniture, home appliances, and cars soared 10.2%, whereas in the previous six months, it had dropped 6.6%.

Finance Minister Yair Lapid will particularly welcome the news; higher growth will help him hit the 4.65% of GDP deficit target for the year, and give him more wiggle room to make adjustments as necessary. For example, over the weekend he announced extended tax benefits for employees working second and third shifts, the kind of adjustments that require extra budgetary flexibility.

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