Treasury Ready to Raise 2010 Forecast

Israel's economy will grow by 3.0%-3.5% in 2010, barring any new long-term major global economic crises. In the second half of the year growth could even hit 4.0% or 5.0%. The country's debt-to-GDP ratio rose by only around 1.0% in 2009 and is expected to do the same next year, while the annual average unemployment is expected to drop to 7.4%.

These relatively rosy figures are part of the Finance Ministry's reevaluation of its forecast for next year, based on the most recent data.

The treasury's official growth forecast for 2010, issued a few months ago, is for 2.5% growth. Now it's debating whether to make the new optimism official, in order to reflect the unexpectedly high growth figures for the last quarter of 2009 - the analysts say it will reach 4.0%, the best quarter since the first quarter of 2008 and one of the best since the start of the crisis in the developed nations began - or to leave the numbers as they are.

In the third quarter of 2009 growth reached 2.2%, compared to 1.0 percent for the preceding quarter and -3.2% for the first quarter of the year.

Finance ministry officials expect the budget deficit for 2009 to fall to 5.1%-5.2%, below the 6.0% target figure, and they are already saying that next year it will be under 5.0%, compared to the 5.5% target.