Israel: the economy increased 7.2% in Q4

During Q3 of 2014, Operation Protective Edge kept the country’s annualized growth rate to a mere 0.6%.

According to a recent report by the Central Bureau of Statistics, in seasonally adjusted fixed prices the Israel economy grew by an annualized 2.6% in the second half of 2014, following a growth of 2.7% in the first half of 2014 and a growth of 3.4% during the second half of 2013. The GDP shot up by an annualized 7.2% in the fourth quarter, following only 0.6% annualized growth in the third quarter when Operation Protective Edge took place, and 2.0% in the second quarter.

The increase in GDP during the second half of 2014 reflects a rises of 7.9% in public consumption spending, 5.4% in private consumption spending, and 0.6% in goods and services exports, while investments in fixed assets decreased 1.9%.

Goods and services imports rose 3.0% during the second half of 2014, while total sources available to the economy in the second half (from domestic production and imports) increased by an annualized 2.5%, following a 1.8% jump in the first half.

Itemization of uses of sources shows that spending on private consumption increased 5.4% during the second half of 2014, after a 3.1% jump in the first half, while per capita spending on private consumption was up 3.3% in the second half and 1.1% in the first half.

As a result of the stagnation in the real estate sector during this period, investments in fixed assets (investments in residential housing and the construction, equipment, and vehicles sectors) dropped by an annualized 1.9% in the second half of 2014, following a 6.8% decrease during the first half and a 5.7% rise in the second half of 2013. Investments in residential construction fell by an annualized 1.4% in the second half of 2014 and an annualized 2.0% in the first half.