Israel's Economy Grows At Faster Pace In Q4

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Tuesday, Israel's gross domestic product grew an annualized 4.4% in the fourth quarter of 2009, after expanding 3% in the previous three months, the Central Bureau of Statistics reported. A year ago, it had shrunk 1.6%.

The economy grew for the third quarter in a row. After registering a further contraction of 3.1% in the first quarter of 2009, the GDP grew 1.2% in the second quarter. The fourth quarter growth was in line with central bank forecast for an increase of more than 4%.

Private consumption increased an annual 4.4% in the fourth quarter, while public spending remained flat. Gross fixed capital formation declined 9.4%, while exports surged 32.9%. Imports rose 13.8%.

The GDP rose at an annual rate of 2.9% in the second half of 2009 after contracting 1.6% in the first six months. In the year-ago period, the economy had grown 0.8%. Initial estimates of the statistics agency had shown that the economy grew 0.5% in 2009.

This month, the Bank of Israel raised its growth forecasts for 2010 citing an improvement in the economic situation in the second half of 2009. Now, the central bank sees 3.5% growth for this year. Late January, the central bank retained its benchmark interest rate at 1.25% on account of low inflation.

(Market News Provided by RTTNews)