No recession: Growth in the 2nd quarter amounted to 6.8% - Among the highest in the world

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by Ifi Reporter Category:Capital Market Aug 16, 2022

There is no recession in Israel and not even a slowdown in economic activity: after the alarming spike in inflation and apartment prices, today (Tuesday) the Central Bureau of Statistics (CBS) published the Israeli economy's data and among them was incredibly positive growth in the second quarter of the year at a rate of 6.8%. This is growth among the highest in the world, precisely when in many countries there is fear of the beginning of a recession.
The particularly high growth comes after disappointing negative growth in the first quarter of 2022, which has even now been corrected for the negative and turns out to have been even more negative than the previous estimate - a 2.7% drop in the first quarter of the year, compared to the Kobalmas figure. They explained that the return to a normal life routine in the second quarter - after The first quarter with a wide spread of the Omicron strain that caused hundreds of thousands of workers to be isolated - affected the increase in the gross domestic product. The hospitality, catering, air transport services and inbound tourism services contributed significantly to the increase in GDP in the second quarter of the year.
The gross domestic product per capita increased at a lower rate than the growth in the economy - 4.5%. The gap this time is particularly large due to a large increase in the population in the second quarter of the year, due to a large increase from Russia and Ukraine in the shadow of the war. Therefore, the number of residents in the country increased above the normal rate.
blood that indicated a decrease of "only" 1.9% in growth. The meaning of the data is that the Bank of Israel will probably announce next week a sharp interest rate increase of 0.75% to deal with inflation, as the danger of a recession seems low now.
In the first half of the year, the gross domestic product increased by 4.8% on an annual basis compared to the previous half, after a 12.5% ​​increase in the second half of 2021 and a 6.2% increase in the first half of 2021.
Another main figure published is the jump in private consumption at a high annual rate of 10.4%. In a quarterly calculation, private consumption per capita increased by 8% compared to the first quarter of the year. This indicates a "shopping spree" and trips abroad in the second quarter of the year, with the almost complete exit from the Corona crisis.
Spending on semi-sustainable products per capita - spending on clothing and footwear, home textiles, small electrical work and household tools, entertainment and leisure products, and personal items - decreased in the second quarter of 2022 by 0.9% on an annual basis, while spending on clothing and footwear increased by 3.9% .
Spending on durable goods (buying cars, refrigerators, washing machines, etc.) per capita increased by 18.7% on an annual basis and spending on vehicles for private use increased by 28% on an annual basis (6.4% on a quarterly basis).
In addition, while public consumption expenditure increased by 5% in the second quarter of 2022 on an annual basis and civilian consumption expenditure increased by 6.8% on an annual basis, defense consumption expenditure actually decreased by 20.1% on an annual basis (5.5% on a quarterly basis).
The increase in consumption was accompanied in the second quarter of the year by an increase of 3.5% in annual calculation in the import of goods and services. This increase expresses a jump of 12.6% in the import of services with the exception of tourism services, which jumped to enormous proportions after the exit from the corona, when the import of tourism services increased by 198.6% on an annual basis (31.4% on a quarterly basis), so that the total import of services increased by 33.7% on an annual basis ( 7.5% on a quarterly basis).
In addition, the CBS report also shows that the import of civilian goods decreased by 1.3% in the second quarter of 2022 and that the sources available to the economy from domestic production and imports increased by 8.4% on an annual basis, after an increase of 2.1% in the first quarter of 2022.
The investment in properties also jumped: the investment in residential houses and the investments of the economic sectors in construction, in equipment and means of transportation - increased in the second quarter of 2022 by 7.7% on an annual basis. The increase in investment in fixed assets reflects an increase of 48.6% on an annual basis in an especially large investment in land transportation vehicles (10.4% on a quarterly basis). The investment in residential construction also increased by a considerable rate of 11.8% on an annual basis and the investment in non-residential construction and other construction works increased by 26.5% on an annual basis.
The increase in property investments also increased greatly - by 7.7% and spending on public consumption increased by 5%, also a relatively high rate, at the initiative of the government.

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