The Israel Manufacturers Association expects economic growth of 4.5 percent in 2007, while unemployment is forecasted to fall to 8.5% from 8.7% in 2006 on the back of strong business product growth.
"Business product will continue to lead GDP, increasing by 5.4% in 2007, after rising 5.6% in 2006, and 6.8% in 2004- 2005," said Nira Shamir, head of the economics division of the Manufacturers Association of Israel.
The Association added that the moderate cut in the number of unemployed in 2007, is expected to increase the number of employed by 2.8% or 73,000 compared with 3.1% in 2006 and 3.9% in 2005.
Shamir added that the increase in work force participation was forecasted to continue next year from 55.7% this year to 56.3%. As a result, the manufacturers expect a slight increase in the number of unemployed of about 3,000 for 2007, despite the forecasted rise in the number of employed next year.
At the same time, public consumption is expected to slow down from 4.7% this year to 4% in 2007, while private consumption per capita is set to grow by 2.2% after growing 2.9% in 2006.