Trump's Populist 'America First' Should Scare American Jews and Worry Israelis

Bank of Israel Halves 2009 Growth Forecast

The Bank of Israel yesterday updated its economic growth forecasts for the second time in a month. It cut its 2008 growth forecast from 4.7% to 4.3%, and chopped almost in half its estimate for next year from 2.7% to only 1.5%.

Only two days ago Finance Ministry director general Yarom Ariav estimated 2009 economic growth at about 2%. The Israeli economy grew 5.3% in 2007.

The update follows the International Monetary Fund's lowering of its forecasts for 2009.

The central bank predicts that unemployment will reach 7% next year, up from 6.1% this year. In 2007 the jobless rate hit 7.3%. The bank predicts that unemployment may even rise above 7% by the end of next year.

The central bank also predicts lower growth in a raft of economic parameters for 2009: exports, imports, industrial production, private consumption and consumer spending.

In addition, the budget deficit will rise, from zero in 2007 to 1.6% this year and 2.7% next year.

However, the Bank of Israel expects Israeli economic growth to be higher than in other developed nations.