2nd Q Was better than expected: the increase in GDP reached an annual rate of 16.6%

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by Ifi Reporter Category:Capital Market Sep 14, 2021

The second quarter of 2021 was better than expected: the increase in GDP in the second quarter reached an annual rate of 16.6%, compared to the initial estimate that growth was only 15.4% - the Central Bureau of Statistics announced today.
This means that the total GDP reached NIS 360 billion in the second quarter - thus surpassing the data for the fourth quarter of 2019 - the last quarter before the outbreak of the corona crisis. However, had it not been for the crisis, Israeli GDP would still have been higher - and the gap has not yet closed.
Overall, in the first half of the year, GDP grew by 5.7%. The official forecast is for growth of 5% -5.5% in 2021 as a whole, but according to the latest data, if there is no deterioration in the economic situation due to the waves of illness, the forecast for 2021 will be sharper and will be higher than 6%. This sharp growth may have further effects on government conduct and the deficit.
The change in the second estimate compared to the first estimate is due to a 22% growth in business GDP in the second quarter (at an annual rate), compared to lower estimates in the first estimate. Exports of goods and services were also higher compared to the first estimate, reaching 17.6%. Private consumption expenditure Jumped 39.2%, compared to 36.3% in the early estimates.
The increase in GDP in the second quarter of 2021 compared to the last quarter of 2019 and reached 15.4% (compared with 15% in the first estimate for the second quarter). For comparison, in the US growth in the second quarter compared to the corresponding quarter in 2020 reached 12.2%, while in France and Spain the growth figures reached 187.5% and 19.8%, respectively.
At the same time, the CBS published today the balance of payments in Israel - the ratio between imports and exports.
The surplus in the balance of services (ratio between purchase and export of services) - an area in which there is extensive activity in the high-tech sector - continued to rise in the second quarter as well, but there was a decline in the balance of goods.
The decrease in the surplus in the balance sheet is due, among other things, to a reduction in the volume of investments by foreign residents in Israel. In the first quarter, investments amounting to more than $ 22 billion were flowed into Israel, but in the second quarter this amount shrank to $ 14.5 billion.

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