Estimates: The Israeli economy contracted in the first quarter of 2020 by 6.9% at an annual rate

The Israeli economy contracted in the first quarter of 2020 by 6.9% at an annual rate, after an increase of 4.6% in the fourth quarter of 2019. This emerges from the third estimate for the first quarter published today (Monday) by the Central Bureau of Statistics (CBS). The negative development of the quarter was affected Directly from the corona crisis and the government's steps to halt the spread of the virus, which slowed economic activity. The CBS 'first estimate predicted a contraction of 7.1% in the quarter and a second estimate of 6.8%.
The sharp decline in car imports intensified the decline in GDP relative to the fourth quarter. Gross domestic product excluding net taxes on imports, which was not affected by the decline in passenger car imports, also fell sharply by 4.2%. The current estimate is based on sources Are not final and complete, and may be updated in subsequent reports.
The data also show that the business product at basic prices, which is not affected by the change in taxes on products in general and taxes on passenger cars in particular, decreased in the first quarter of 2020 by 4.3% on an annualized basis, after an increase of 2.5% in the previous quarter.
Imports of goods and services decreased by 23.4% on an annualized basis, after an increase of 11.3% in the previous quarter. This decrease reflects a sharp decrease of 52% in the import of services on an annual basis (and a decrease of 16.8% compared to the previous quarter), which includes a decrease of 85.2% in the import of tourism services.
Private consumption expenditure, which was hit very hard by the Corona crisis and was also affected by the significant decline in passenger car imports (due to early purchases in the fourth quarter of 2019), fell by 20.8% in the first quarter on an annualized basis. Private consumption per capita decreased by 22.2%, while private consumption expenditure per capita excluding durable goods (which does not include the effect of passenger car imports) decreased by 16.8% on an annual basis.
Expenditure on the consumption of various services per capita decreased by 34.1% on an annualized basis (9.9% on a quarterly basis), while the impact of the corona crisis led to particularly high declines in transportation services (in Israel and flights abroad), accommodation and cultural and leisure services. Consumption of food, beverages and tobacco on an annual basis.
 Expenditure on semi-durable goods per capita, including clothing and footwear, home textiles, small electrical appliances and household goods, entertainment and leisure products and personal belongings, decreased by 32.4% on an annualized basis (9.3% on a quarterly basis), while expenditure on clothing and management decreased by 36.5% (10.7% on a quarterly basis).
Expenditure on durable goods per capita (including personal vehicles, televisions, washing machines, furniture and jewelry) decreased by 53.6% on an annualized basis (17.5% on a quarterly basis), while expenditures on vehicles for private use decreased by 86.3% on an annual basis (39.2% on an annual basis). Quarterly) after a high increase in the previous quarter due to a change in taxation policy.
The data also show that civilian consumption expenditure decreased by 5.7%, while the compensation for employees included in this expenditure decreased by 11.8% due to the exceptional vacation taken by workers during the month of March.
Defense consumption expenditure decreased by 22.7% on an annualized basis (6.2% on a quarterly basis) in the first quarter, reflecting a decrease in both local and import purchases. On the other hand, the compensation for employees (salary expenses for soldiers and reservists) was not affected as a result of the corona crisis and increased by 10.7%.
The data in the report also show that investment in fixed assets (in dwellings and investments by the economy in construction, equipment and vehicles) decreased in the first quarter of 2020 by 20.7% on an annualized basis. Investment in residential construction decreased by 13.3%, and investment in non-residential construction and other construction works decreased by 14.7% on an annualized basis.
Exports of goods and services (excluding diamonds and start-ups) increased in the first quarter of 2020 by 4.1% on an annualized basis (2.9% in the previous estimate). Exports of tourism services fell sharply by 63.9% on an annualized basis and by 22.5% on a quarterly basis due to the corona crisis. On the other hand, exports of other services (including exports of software, transportation and communications services, etc.) increased by 4% on an annual basis. Manufacturing exports excluding diamonds increased by 25.6%, including natural gas, whose significant export process began this quarter. Diamond exports, on the other hand, fell by 29.6% on an annual basis.