First quarter of 2022: GDP contracted by 1.6% compared to the fourth quarter of 2021

wwwww

by Ifi Reporter Category:Capital Market May 16, 2022

After the recovery from the corona crisis, which led to sharp growth in the Israeli economy, the data published indicate a contraction of 1.6% in GDP in the first quarter of 2022 compared to the fourth quarter of 2021, in annual terms (ie, the result would be . The decline is in contrast to some of the preliminary estimates, which predicted a 2% increase in GDP in the first quarter.
The decline in GDP may affect a series of policy decisions that are due to be made soon. The closest decision is that of the Bank of Israel's Monetary Committee next Monday regarding the interest rate in the economy. The committee members, who at their last meeting raised the interest rate from 0.1% to 0.35%, will now see before their eyes an economy that is on a contractionary trend, and they may reconsider whether to raise the interest rate at a rapid pace, which will further slow down economic activity.
In addition, the contraction may affect the government and how the next state budget is formulated. If the growth rate of the economy slows down, there may be concerns about the Israeli economy and about the future of tax collection. Although the volume of tax collection was very high in the first quarter, a slowdown in growth may signal a future decline in collection - and therefore this may have implications for the 2023 budget.
Despite this, a limited guarantee should be taken into account for the decline in GDP in the first quarter. The decline in economic activity comes after a sharp and unusual increase of 15.6% in GDP (on an annualized basis) in the last quarter of 2021. , The growth rate is still high, about 14% on an annual basis.
Also in the official publication of the Central Bureau of Statistics today, which included the growth data, it is mentioned that when looking at the data for the first quarter of 2022 against the data for the first quarter of 2021, one still sees a sharp annual jump of 9% in GDP. According to the CBS, this is a sharp increase in economic output that has not occurred in the last 20 years, and it reflects the recovery from the corona crisis.
The decline in economic activity in the first quarter may affect forecasts for growth in 2022 as a whole. According to the Ministry of Finance's forecast, growth in 2022 will reach 4.7%, while the Bank of Israel expects sharper growth of 5.5%.
Israel is not the only developed country to record negative data in the first quarter of 2022. In the US there was a decrease of 0.4% in GDP compared to the previous quarter (quarterly calculation), in France there was no change and in Germany GDP grew by only 0.2%. In Israel, the change in the first quarter Quarterly) is down 0.4%, similar to the US. However, as mentioned, the sharp decline in the last quarter comes after in the fourth quarter of 2011 Israel recorded a sharp growth of 9%, more than most developed countries
The decline in GDP and its uses in the first quarter of 2022 was due to a contraction in a number of parameters. Expenditure on private consumption shrank at an annual rate of 0.7% in the first quarter, after a jump of 18.2% in the previous quarter. Expenditure on public consumption fell at a faster rate, 7%, after an increase of about 13% in the previous quarter
Exports - Israel's most stable activity, which left the local economy on its feet even during the corona period - were hit in the first quarter of 2022 and shrank by 11% on an annual basis, after rising 25.3% in the fourth quarter of 2021. The sharpest decline was in exports of services, which fell in -21.4%.
Thanks to the prosperity in the real estate industry, the item that continued to soar in the first quarter was investment in residential construction, which rose by about 13%. Investments in fixed assets in other industries shrank by 5.7%. On the other hand, imports At a rate of 17.3% on an annual basis, part of the jump is attributed to the sharp increase in imports of tourism services - travel and various payments by Israel abroad - after the opening of the sky after the closures during the Corona period.
On the other hand, imports (which are deducted from the calculation of domestic product) continued to rise in the first quarter at a rate of 17.3% on an annual basis. Part of the jump is attributed to the sharp increase in imports of tourism services - various trips and payments by Israel abroad - after the opening of the sky after the closures during the Corona period.

271 Views

Comments

No comments have been left here yet. Be the first who will do it.
Safety

captchaPlease input letters you see on the image.
Click on image to redraw.

ABOUT IFI TODAY

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum

Testimonials

No testimonials. Click here to add your testimonials.