GDP contracted in the first quarter of 2021 by 5.8% on an annual basis

Israeli GDP contracted in the first quarter of 2021 by 5.8% on an annual basis - according to the third estimate of the Central Bureau of Statistics published today. This is a lower contraction rate of the economy compared to earlier estimates. 6.2%. The first quarter of 2021 was characterized by the continued spread of the corona plague and the imposition of closures. At the same time, there was a sharp decline in passenger car imports, which hurt consumption and investment. The decrease in imports also reduced tax revenues on imports, in light of a change in taxation policy in Israel.
At the Central Bureau of Statistics we also updated the rate of decline in private consumption. In the previous CBS estimate, it was estimated that the decline in private consumption was sharp, reaching 3.4%. It is now estimated that the decline was more moderate, amounting to only 2.4%.
The change in the first quarter of 2021 compared to the corresponding quarter in 2020 amounted to 0.3%. Compared with international equivalents, the decline in the first quarter in Israel was relatively moderate compared with the United Kingdom (a decrease of 6.1%) and Germany (3.1%). However, there were policies that managed to register a recovery in the first quarter, including France (1.2% growth) and the US (0.4%).
On August 16, the CBS will publish its estimate of GDP developments in Israel in the second quarter of 2021. This quarter is expected to see sharp growth in light of the recovery from the corona plague and the full opening of the economy.