Fighting with Hamas, weak Q1 may dent 2021 Israel economic growth

* GDP fell annualised 6.5% in Q1 vs expectations of 3.6% growth

* Consumer spending, investment drop in January-March period

* Strong high-tech sector boosts exports

* Economy losing 200 mln shekels a day from Gaza conflict

By Steven Scheer

JERUSALEM, May 18 (Reuters) - Israel's economy contracted by 6.5% in the first quarter, the Central Bureau of Statistics said on Tuesday, as economists warned that renewed fighting between Israel and Palestinian militants could curb its economic recovery from the pandemic.

After posting a better-than-expected 2.6% contraction in 2020, Israel's economy was projected to grow between 5% and 7% this year on the heels of a rapid vaccination roll-out that has led to a nearly full reopening of businesses after emerging from a third lockdown in mid-March.

But data published on Tuesday showed gross domestic product shrank more than expected in the January-March period from the prior quarter and was in contrast to expectations of 3.6% growth forecast in a Reuters poll of analysts. Consumer and government spending and investment fell in the quarter, while exports rose.

At the same time, Israel's economy -- in which the jobless rate fell below 8% in April and inflation stands at 0.8% -- is losing close to 200 million shekels ($61 million) a day from a conflict between Israel and Hamas militants in the Gaza Strip that has entered a second week.

Ofer Klein, head of economics and research at Harel Insurance and Finance, after the GDP data cut his 2021 growth estimate to 4.2% from 5%, mainly on lower consumer spending expectations. Liam Peach, emerging markets economist at Capital Economics, is maintaining a 7% estimate for now.

"With the economy starting the year on weak footing and an extended military conflict a growing concern, the risks to our forecast for GDP growth ... this year are skewed firmly to the downside," Peach said. "An extended military conflict weighs on sentiment and disrupts activity in large parts of the economy."

Klein noted that the first quarter would have been worse if not for solid high-tech exports. He anticipates an economic rebound in the second quarter given positive data since April.

"Growth figures from the first quarter are less relevant today especially since we know there has been a very large change in economic conditions since then" with the end of the lockdown, he said.

Last week, Bank of Israel Governor Amir Yaron told Reuters Israel's economy was remained on track for 6.3% growth in 2021 "as long as there is no new mutation (of the coronavirus) that is detrimental".

Over the first quarter of 2020, GDP fell 0.5%. The bureau revised fourth-quarter GDP to annualised growth of 6.3% from 6.5%.

($1 = 3.2696 shekels)
Reporting by Steven Scheer, Editing by William Maclean and Raissa Kasolowsky

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。


本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示: 您的資金存在風險。杠杆商品可能不適合所有客戶。 請詳細閱讀我們的風險聲明