The Bank of Israel raised its growth estimate for the economy in 2008 to 4.2 percent, up from the previous forecast of 3.2%, on positive economic data in the first quarter of this year and expectations that the impact of a deepening global economic slowdown on the local economy will come only in 2009. "The revised outlook for 2008 is a result of the positive data on gross domestic product and employment registered in the first quarter of this year as well as positive data from most of the developed countries," said the central bank in its macro-economic report for 2008-2009. Figures published last month showed that the economy grew at an annualized rate of 5.4% in the first three months of the year, racing ahead of the gloomy growth outlook issued by the Bank of Israel. GDP growth in the January to April period was boosted by a rise in private consumption, exports of goods and services and investments in fixed assets. Just in April the central bank had lowered its growth outlook for this year to 3.2% from the previous projection of 3.5%, citing the slowdown in world economies, while the Finance Ministry has been sticking to its growth forecast of 4.2% for 2008 and 3.5% for 2009. "I am not surprised about the central bank's move to revise its projections," Shlomo Maoz, chief economist at Excellence Nessuah Investment House told The Jerusalem Post in a phone interview. "Following strong economic data in the first months of this year, the bank admits that its projection was mistaken. Better late than never." Other investments banks such as Citigroup already anticipated the upgrade. "We expect the Bank of Israel's 2008 growth forecast to be revised up somewhat to reflect the observed resilience of the Israeli economy," said Citigroup analysts in a report to investors this week. For 2009, the central bank lowered its forecast moderately to 3.1% from 3.4% previously on expectations that the impact of the global economic slowdown will hit the local economy later than the bank had estimated in earlier forecasts. "The continued slowdown in activity in the US and expectations of a global slowdown, combined with a sharp appreciation of the shekel, a worsening of terms of trade, and weak data from company and industry surveys all point to a slowdown in economic activity later in 2008 and in 2009," stated the bank's report. Moaz, who expects the economy to grow 3.8% this year, said the next quarters were likely to show a gradual slowdown in the growth rate continuing into 2009. Furthermore, the bank revised its estimates for the private consumption growth rate upwards to 6.9% from 4.2% previously. In 2009 the private consumption rate is projected to slow down to 4.2%. "One of the main factors behind the expansion of the economy this year is the rise in private consumption," said Maoz. For this year, the bank expects unemployment to drop to 6.4% from 7.4% in its previous forecast and climb to 6.6% in 2009. The Central Bureau of Statistics reported on Wednesday that its monthly unemployment rate for April was unchanged at 6.3% as compared with the previous month.