Despite the grim business pages in recent months, in fact the year 2008 was a good one for Israel's economy. Preliminary estimates by the Central Bureau of Statistics place the growth of Israel's gross domestic product at 4.1% in 2008. That is a respectable figure, even if lower than the brisk 5.4% pace achieved in 2007.
Broken down by half-year periods, however, the picture of a slowing economy is striking. First-half growth was 4.9%, says the stats bureau, but during the second six-month period the pace tumbled to 1.8%. (All figures are in annualized terms.)
Gross domestic product per capita rose to NIS 97,900 (which is about $27,300), an increase of 2.2% compared with the year 2007. In the nations constituting the Organization for Economic Cooperation and Development, which Israel aspires to join, by the way, the average increase in GDP per capita was 0.8% in 2008.
Of course, the question now is 2009, for which estimates of growth vary widely. At this point the Bank of Israel is predicting GDP growth of 1.5% while I.B.I. is predicting 2.1%. Both would constitute negative growth per capita, which means population growth would outpace economic growth.
Israel's gross domestic product amounted to nearly NIS 716 billion in 2008, compared with NIS 674 billion the year before.
Another figure shows just how unnerved consumers have become. Expenditure on private consumption increased by 3.9% in 2008, says the Central Bureau of Statistics, after growing by 6.7% the year before. After factoring in population growth, expenditure on private consumption increased by 2% in 2008.
Sellers of refrigerators possibly suffered less than food retailers, it would seem. Breaking down private consumption expenditure by sector shows that expenditures on durable goods increased by 7% in the year 2008 while spending on food and clothing increased by a lesser 2%.
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