Surprise! Israeli GDP Shot Up 5.1% in Second Quarter

Consumer spending also shot up in the first half of the year, in part thanks to VAT hike.

The Israeli economy grew by a surprisingly brisk 5.1% in the second quarter of 2013, in parallel with a steep increase in consumer spending, according to Central Bureau of Statistics figures released on Sunday.

The rapid pace of growth in the second quarter, April-June, boosted first-half expansion to 3.4% in annualized terms.

That first-half pace of growth is roughly unchanged from the last half-year of 2012.

At present the Finance Ministry is predicting 3.5% growth for the year 2013, while the Bank of Israel is a hair more optimistic, with a forecast of 3.8%.

Meanwhile, consumer spending shot up in the January-June period, growing by 3.1% per capita, after growing by a mere 0.2% per capita in the second half of 2012.

Shoppers packing the Azrieli Center mall in Tel Aviv.
Ofer Vaknin