IMF Forecasts 3.3 Percent Israel Economic Growth 2018


Israel’s economy will grow 3.3 percent in 2018 and 3.5 percent in 2019, the International Monetary Fund (IMF) said in a forecast published on Tuesday.

The IMF also sees an inflationary rise from 0.2 percent in 2017 to 0.7 percent in 2018 and 1.3 percent in 2019. Unemployment is expected to hold steady at 4.2 percent through 2019, while the balance of payments will continue to be positive, with surpluses of 2.6 percent of GDP in 2018 and 2.7 percent in 2019.

The positive outlook is consistent with its global forecast, which predicts that the global economy will grow by a fairly rapid 3.9 percent this year and next year.

According to the IMF, expansion of investment in many economies accelerated growth to over 4 percent in the second half of 2017, the highest figure since 2010. Following the next two years, however, the weight of negative processes and factors will rise and be reflected in lower growth. The IMF expects the current expansionary monetary policy to be abandoned in most economies, while the force of fiscal expansion will dissipate. At the same time, the clear slowing of the increase in productivity and the aging population will have a negative impact on the growth rate.

The IMF foresees that the developed economies will grow faster than their long-term growth potential, thereby narrowing the gap between output and production capacity, especially in Europe. In Asia and the emerging European markets, growth should be strong, while countries that export commodities and raw materials will benefit from higher demand and exports over the next two years.