Brosh: Economy to grow 4.5% in 2006

Exports of goods and services will grow faster next year, expanding 8.1% following this year's predicted 6.5%, and last year's 17.4% surge.

November 21, 2005 07:11
2 minute read.
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Israel's gross domestic product will expand 4.5 percent in 2006 following this year's predicted 5.1% growth, Israel Manufacturers Association President Shraga Brosh said Sunday. Business-sector product will grow an estimated 5.7% and unemployment will decrease to 8.6% in 2006, with the number of unemployed Israelis falling to 243,000 from the current level of 247,000, he predicted. Brosh added that participation in the work force will likely rise to 55.6% from 55.2% this year. Per capita gross domestic product (GDP) will grow 2.8% in 2006, following the 3.2% forecast for 2005 and last year's 2.6% per capita growth, he said, while consumer spending will continue growing at a rate of 3.8% in 2006, following 3.5% growth in 2005 and 5% growth last year. Consumer spending will be supported, he believes, by further increases in wages, employment, and assets held by the general public and will be further boosted by gains on the stock exchange, alongside a low interest rate, deeper tax cuts, and relative calm on the security front. Consumer spending per capita will grow 2.1%, after rising 1.6% this year and 3.2% in 2004. Exports of goods and services will grow faster next year, expanding 8.1% following this year's predicted 6.5%, and last year's 17.4% surge. Brosh is predicting next year's acceleration in exports due to Israel's improved international standing, a "warming up" of the country's ties with various Arab countries, the "significant" growth potential in trade with the Palestinian Authority, and forecasts of slight acceleration in the growth of trade worldwide, he said. Civilian imports will increase 5.6%, after rising a predicted 3.6% by the end of this year, Brosh said. He called on the government and members of the Knesset to "show national responsibility" by keeping elections season as short as possible, avoiding "populist election economics," and respecting the current limits on budgetary spending. He warned that not approving the budget on time would endanger government programs for investment in the economy in terms of capital investments and investments in research and development.

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