Economic Growth Disappoints Government Forecasts

The Israeli economy performed substantially below the expectations of Ministry of Finance forecasters in the first quarter of this year, according to Central Bureau of Statistics figures on Monday.

The economy grew at an annualized rate of just 0.8 percent in the first quarter, in an initial estimate for the first quarter in comparison with the fourth quarter of 2015, seasonally adjusted.

This, in contrast to the ministry’s forecast of 2.8 percent. The CBI numbers will bring pressure on the Ministry and the Bank of Israel to lower their annual growth forecasts, Globes said.

The Central Bureau of Statistics states that, at annualized rates, private sector gross product fell by 0.4 percent, private consumption rose 4 percent, investment in fixed assets rose 7.5 percent, exports of goods and services fell 12.9 percent, and public spending fell 1.7 percent in the first quarter of 2016 in comparison with the fourth quarter of 2015.

Meanwhile, Shufersal, Israel’s largest supermarket chain, was a bright spot in the economic picture, announcing that its profit quadrupled in the first quarter, boosted by higher sales and cost-cutting measures.

Shufersal posted net profit of 53 million shekels ($14 million) in the January-March period, up from 13 million a year earlier.

Revenue grew 0.8 percent to 2.9 billion shekels.

It noted that its results came despite the lack of heavy shopping ahead of Pesach, which fell in April this year but in March in 2015.

Same-store sales in the quarter rose 3.6 percent, although they were up 7.8 percent excluding the influence of Pesach.

Shufersal is controlled by holding company Discount Investment Corp.