Israel Economy Grows 3.3% in 2019, Beating Central Bank Estimate

(Bloomberg) -- Israel’s economy grew an estimated 3.3% in 2019, beating the central bank’s forecast, with public and private consumption leading the expansion.

The Bank of Israel’s research department had predicted in October that gross domestic product would expand 3.1% this year and slow to 3% in 2020. Growth was 3.4% in 2018 and 3.6% in 2017.

Israel’s economic expansion comes despite a year of political turmoil, as back-to-back elections failed to produce a permanent government. As the country heads to another vote, that vacuum has delayed key reforms and investments, and postponed fiscal steps needed to correct a widening budget deficit.

GDP growth was led by rising consumption and exports. Public consumption expanded by 4.1% in 2019, while private consumption rose by 3.9%, the statistics bureau said Tuesday. Exports gained 3.3%, after rising 5.6% in 2018.

Fixed investment rose by 0.3%, after a 4.8% increase in 2018. Investment in construction, research and development as well as gas and oil exploration increased, while that in machinery, equipment and vehicles declined, according to the bureau.

Growth per capita was 1.3%, compared with 1.4% in the previous year, it said, estimating the government will end the year with a deficit of 3.2% of GDP, up from 2.9% last year.

To contact the reporters on this story: Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net;Ivan Levingston in Tel Aviv at ilevingston@bloomberg.net

To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, Michael Gunn

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