CBS estimate: Gross domestic product rose by only 1% in the second quarter of 2019

Gross domestic product (GDP) rose by only 1% in the second quarter of 2019, according to the first estimate for the second quarter, published by the Central Bureau of Statistics (CBS). This is a decline in the growth rate of the economy in the quarter, after an increase of 4.7% in the first quarter of the year, and in the fourth quarter of 2018, an increase of 4.2%. This is the first estimate made by the CBS for the second quarter, based on incomplete sources and expected to be updated later - in the estimate that will be published next month and in October.
GDP contraction in Israel joins global trend of decline in GDP in second quarter About 0.4% and the US about 2.1%.
The moderate increase in GDP in the second quarter is explained by a 1.3% decrease in private consumption expenditure (excluding durable goods, where a 7.2% increase was recorded), and 3.1% in fixed asset investments, which was affected by a significant decline in vehicle imports; This, after an increase in vehicle imports in the previous quarter, due to a change made on April 1 in the green tax, raised the prices of some of the cars and led to the introduction of vehicle purchases.
The impact of the fall in vehicle purchases in the second quarter is moderated slightly in the median data published in the current estimate, whereby in the first half of 2019 gross domestic product rose 3.6% year-on-year; This is after 2.8% increases in the second half of 2018 and 3.5% in the first half last year.
The data also show that GDP excluding net taxes on imports (unaffected by the decrease in import tax revenues due to the decrease in vehicle purchases compared to the first quarter - BP) rose by 3.1% in the second quarter of the year - after an increase of 3.2% in the quarter. the first one.
Exports of goods and services (excluding start-ups and diamonds) rose 4.6% in the second quarter, following an increase of 8.3% in the previous quarter; In addition, public consumption expenditure increased by 10%, and imports of goods and services climbed by 2%, after rising by 5.7% in the previous quarter. However, less security imports, ship imports, aircraft imports and diamond imports - a 2.5% decline was recorded in the second quarter, following a 9.2% increase in the previous quarter.
Investments in fixed assets, excluding ships and aircraft (in residential and investment sectors of the economy in construction, equipment and land transport), decreased by 8.8% on an annual basis, after an increase of 11.7% in the previous quarter. This reflects a 98.1% decrease in annual investment in land transport vehicles (62.6% in quarterly calculation), following an increase of 723.6% in the previous quarter (69.4% in quarterly calculation).
As mentioned, private consumption expenditure decreased by 1.3% in the second quarter in an annual calculation, which means a 3% decrease in per capita expenditure. This compares with increases of 3.8% in the previous quarter and of 5.3% in the fourth quarter of 2018.
The decline reflects a 66.3% drop in expenditures on durable per capita products in annualized terms (23.8% in quarterly calculations), following an 84.5% increase in the previous quarter (16.5% in quarterly calculations). Expenditure on purchasing vehicles for private use decreased by 96.2% on an annual basis (55.8% on a quarterly calculation), after an increase of 692.8% (67.8% on a quarterly calculation) in the previous quarter.
Excluding durable goods, there was a 5.4% increase in private consumption expenditure. Meanwhile, household equipment expenditure, such as refrigerators, washing machines and air conditioners, increased by 6.6% on an annual basis, after an increase of 7.5% on an annual basis in the previous quarter; In contrast, furniture, jewelry and watch spending fell 4.2% year-on-year, after falling 12.2% year-on-year in the previous quarter.
Spending on apparel and footwear, home textiles, small utensils, entertainment and leisure goods, etc., jumped 26% in the quarter on an annualized basis (6% on a quarterly basis), after falling 16.6% on the previous quarter (4.4% on a quarterly basis); Private consumption expenditure per capita, including food, utilities, housing, fuel, housekeeping, travel abroad and the like, also increased by 3.5% on an annual basis, compared with a decrease of 0.1% in the previous quarter.
National expenditure on health stood at 7.6% of GDP in 2018, amounting to NIS 101.2 billion. At constant prices (ie, a figure that lowers the CPI and is not affected by increases or decreases in the economy - BP), this is a 4.3% increase over the year. 2017, and a 2.3% increase in per capita expenditure.
The figures also show that last year there was a 4.7% increase in private and supplementary health insurance spending, with supplementary insurance spending down 2.6%, while private insurance spending (including medical expenses, serious illnesses, dental, foreign workers and overseas insurance) L) increased by 10.3%. In 2018, health funds provided 34% of health services.
Compared to OECD member states, the percentage of current national health expenditure on GDP in Israel (7.4%) was lower than the average in 2018, which was 8.8%; In the US, a figure of 16.9% was recorded. In addition, the percentage of public funding for national health expenditure in Israel (64%) is lower than the average public funding in the OECD countries, which was 74%.