Figures of the second quarter released by the Israeli Central Bureau of Statistics provide a promising indication that the economic conditions in the country are rebounding. The Gross Domestic Product in the second quarter rose 1-percent, after dropping 1.4-percent and 3.2-percent in the previous two quarters. Moreover, the Consumer Price Index rose 1.1-percent, primarily due to an increase in 1-percent to the VAT tax and increased taxes on water due to country-wide shortages. However, the figures for the year thus far reveal the significant negative effects of the global economic crisis. To date this year, GDP dropped 1.7-percent and exports fell 23-percent.
In response to the figures, Prime Minister Binyamin Netanyahu stated:
“The figures noted over the past few quarters indicate that the Israeli market is doing better than other leading world markets… The rise in private consumption, exports and tax revenues is very encouraging.”
However, Finance Minister Yuval Steinitz assessed the situation more cautiously, stating:
“We are positive that the financial plan and the biennial budget devised by the government would continue to contribute to the market’s rapid growth… Nevertheless,” he continued… It’s still too early to announce that the recession is over and that the financial crisis is behind us… The government will continue to act in order to curb the effects the recession has on the Israeli markets.”