Economy grows 0.5% in 2009

Economy grows 0.5% in 20

graph up 248.88 (photo credit: )
graph up 248.88
(photo credit: )
Defying most forecasts, the Israeli economy emerged from the global economic crisis as one of the very few that grew over the past year. The local economy expanded at a rate of 0.5 percent in 2009, compared with 4% in 2008, according to preliminary data the Central Bureau of Statistics published Thursday. By comparison, economies of Organization of Economic Cooperation and Development countries contracted at an average rate of 3.5% in 2009. "All signs point to us exiting the crisis," Soli Peleg, head of the bureau's macroeconomics division, said in the report. "If you compare us to the rest of the world, the effect of the crisis on us was more moderate." The Bank of Israel and others had expected the local economy to be flat in 2009 and grow 2.5% in 2010, while earlier forecasts had predicted a negative rate of 1.5% in 2009. The bureau's data showed that gross domestic product expanded at a 3% annualized rate in the third quarter, after growing 1.1% in the second quarter and contracting 3.2% in the first quarter. GDP per-capita growth fell 1.3% in 2009, after growing 2.2% in 2008, the bureau reported. Per-capita growth in OECD countries dropped 4%. The unemployment rate averaged 7.7% in 2009, compared with 6.1% in 2008. In OECD countries, the unemployment rate averaged 8.2% in 2009. Business-product growth was down 0.4% in 2009, after growing 4.5% in 2008 and 5.6% in 2007. Industrial growth dropped 6.2% and was down 5.5% within the transportation, storage and communications sectors, the bureau reported. Product growth rose 7.4% within the business and financial-services sectors. Exports of goods and services fell 13.2%. Industrial exports dropped 10.1%, after growing 11.3% in 2008. Exports of diamonds plunged 31.1%. Exports expanded an annualized rate of 6.7% in the September-November period, the first quarterly increase since the beginning of 2008, according to a separate report the bureau published Thursday. Industrial exports rose 7.6% in the third quarter, while industrial production increased 7.8%. Private consumption was up 1.1% in 2009, after rising 3.6% in 2008. Per-capita private consumption fell 0.6% in 2009, mainly due to an increase of 1.8% in the population, the bureau reported. Public consumption increased 1.7%, after rising 2.2% in 2008. Investment in fixed assets, including housing, construction and transportation, dropped 6.6% in 2009, after growing 4.4% in 2008. The Tel Aviv-25 Stock Index surged 75% in 2009, led by Delek Group Ltd., an energy and real-estate company, which rose more than six-fold, and Israel Corp Ltd., a holding company with interests in chemicals and energy, which gained more than 200%. The current-account surplus for 2009 is expected to be 3.7% of GDP, or $7.2 billion, more than triple that of 2008, the bureau reported. The government's budget deficit, including local authorities, is estimated at 4.1% of GDP. Bloomberg contributed to this report.