The Israeli economy will begin growing in the second quarter of 2010, according to Bank of Israel Deputy Governor Zvi Eckstein. "The development of the Israeli economy will depend on US President Barack Obama and his government," he said Tuesday at a conference on the global economic crisis hosted by the Ruppin Academic Center in Emek Hefer. "In the autumn of 2009 the financial markets are expected to stabilize, and toward the second quarter of 2010 the economy will rebound." The Bank of Israel forecasts the economy to contract by 1.5 percent this year. Last month, the central bank cut its 2010 growth forecast from 2.3% at the beginning of the year to 1%, after estimates for world trade were revised downward. The Central Bureau of Statistics reported Sunday that the economy had fallen into a recession for the first time in eight years after it contracted at a 3.6% annualized pace in the first three months of this year and 0.5% in the previous quarter, as exports plummeted and investment in fixed assets slumped. "Bank of Israel surveys, collapsing trade and rising unemployment indicate that the slowdown is likely to have gained pace versus the last quarter of 2008," David Hauner, head of emerging economics at Merrill Lynch, said Tuesday. "So far, the Bank of Israel has taken the lead in policy stimulus by bringing rates down. In the second half of 2009 we expect a relative improvement in activity on the back of monetary and fiscal stimulus and improving global backdrop." "These are challenging times for the global economy as well as for the Israeli economy," Industry, Trade and Labor Minister Binyamin Ben-Eliezer said Tuesday at a hi-tech conference hosted by the Israel Venture Association in Tel Aviv. The economic crisis has presented an opportunity and responsibility to support and encourage the local hi-tech sector, he said. "Despite hardships and challenges, the Israeli hi-tech sector has maintained its position as a world leader in ingenuity and innovation and as a major growth engine of the Israeli economy," Ben-Eliezer said. "I believe that today, more then ever, it is our duty to continue and support this important economy on its efforts to further establish its abilities and become even more prominent than before." There are currently about 80 venture-capital funds operating in Israel, with total capital raised of $10.6 billion and investments in more than 1,000 local start-up companies. Many of these start-ups went through successful IPOs. There are 70 Israeli companies traded on Nasdaq and about 30 traded on various European exchanges. Israel is ranked second, after Canada, in number of non-US companies traded on Nasdaq. The average size of the leading Israeli VC fund jumped from $20 million in 1993 to more than $250m. today. "I have instructed my ministry to develop and prepare a program that will enable us to better support the industry and deliver improved tools to fight unemployment," Ben-Eliezer said. "Following discussions with the finance minister, we received an additional NIS 450 million for the Chief Scientist's budget."