Second Quarter Growth Slows, Numbers Show

After a 4.8-percent growth rate recorded in the first quarter, the Israeli economy expanded just 2 percent in the second quarter, the Central Bureau of Statistics (CBS) announced. Much of that growth was due to an increase in consumer spending, which rose 0.5 percent in the second quarter. Investments in assets fell sharply, by 6.6 percent, while government spending was up 5.2 percent.  Overall growth for the first half of the year was 4 percent, the CBS said.

According to the CBS, growth in the first quarter was skewed upward artificially, because that was when a wave of purchases of vehicles was recorded. Many of the vehicles delivered in the second quarter were recorded as purchased in the first quarter.

Speaking to Yisrael Hayom, Shmuel Ben-Aryeh, head of investments at Pioneer Group Investments, said that “looking towards the future, the economy is still in a good place, but the latest report could presage a deterioration of the situation. We may have difficulty producing the kind of growth numbers we have gotten used to over the past three years,” he said, adding that the latest numbers could cause the shekel to weaken further against the dollar – something that would help Israeli exports and thus help economic growth.