Car Imports Drive Up GDP

YERUSHALAYIM -
israel cars
Heavy traffic in Tel Aviv, Menachem Begin Street. (Gili Yaari/Flash90)

A huge surge in the purchase of imported cars has been credited with a significant rise in GDP growth in Israel in the first quarter of 2019, according to the Central Bureau of Statistics on Thursday.

Initial estimates say the economy grew 5.2 percent on an annualized basis in the first quarter, versus 3.9 percent in the fourth quarter of 2018 and 2.8 in the third quarter of 2018.

After deducting the import of vehicles and the income from tax on those vehicles, the economy grew 3.7 percent in the first quarter of 2019 and 3 percent in the fourth quarter of 2018.

Spending on vehicles for private use soared by almost 600 percent in the first quarter of 2019 after a jump of 40.4 percent in the preceding quarter, due to an expected reduction of tax benefits as part of the green tax law.

Business output was also on the upswing, 5.8 percent higher in the first quarter of 2019, after rising 3.9 percent in the fourth quarter of 2018 and 2.5 in the third quarter of 2018.

Imports of goods and services went up 6.7 percent in the first quarter of 2019 after rising 12.2 percent in the preceding quarter. Exports of goods and services increased 4.9 percent on an annualized basis in the first quarter of 2019.