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Israel's gross domestic product grew 4.1 percent in annual terms in the fourth quarter of 2005, as the business sector product grew 5.4%, the Central Bureau of Statistics said Tuesday.
"We are in a growing economy, and this simply confirms what we already knew," said Rafi Melnick, dean of the Lauder School of Government at the Interdisciplinary Center in Herzliya and formerly of the Bank of Israel.
"Macroeconomic fundamentals are very strong, there is no inflation, no problem of balance of payments, and no [problem of] government deficit," he said, adding that the strength of macroeconomic developments in Israel have succeeded in tempering reactions to various geo-political shocks absorbed locally and internationally.
The bureau also updated the third-quarter GDP growth figure to 4.4% and business sector product to 6.5%. The economy grew an annualized 4.9% in the second half of the year, following 5.3% growth in the first half, the CBS said, attributing second-half growth to rises in consumer spending (4.5% annually), investments in fixed assets (2.9%) and exports of goods and services (up 3.2%, excluding start-up companies and diamonds).
Investments in fixed assets fell 11.8% in the fourth quarter, with investment in industries down 13.3%.
Per capita consumer spending rose 2.1% in the fourth quarter and 2.7% in the second half as a whole, reflecting increased purchases in most household consumer goods. Durable goods spending per capita rose 1.9% in the second half, despite slipping 4.4% in the fourth quarter and 7.5% in the third.
Spending on furniture rose 8.4% in the second half while 3.9% more was spent on home appliances. Spending on private vehicles fell an annualized 2.5% per capita, following a 15.4% rise in the preceding six months.
Excluding durable goods, per capita consumer spending rose 3.1% in the second half (4.1% in the fourth quarter), reflecting a 11.9% rise in travel abroad; 5.6% growth in spending on food; a 6.7% rise on fuel and electricity; and a 5.5% rise in various services. Spending on clothing clothing and footwear fell 0.6%, following a 20.3% rise in the first half of the year.
Public sector spending (excluding defense imports) remained stable.
Growth in business sector product in the second half of the year reflected growth in industrial sectors and most service sectors, including transportation and communications, commerce and hospitality, and business and financial services. Construction remained stable.
Total resources available to the economy - whether domestically produced or imported - grew 3% in annual terms in the second half of 2005, following 5.1% growth in the first half, as goods and services imports fell 3.5% (including a 16.4% drop in the fourth quarter and a 5.6% drop in the third), as imports of civilian goods dropped 1.9% and services imports were stable.
Investment in various sectors of the economy (excluding purchases of aircraft and ships) rose an annual 5.9% in the second half.