December 17th , 2019.
Bottom line: The current account surplus in the third quarter, at $3.9bn, was $300m. less than that in the second quarter. Although each of the four components of the current account (see below) declined compared to the second quarter, the net change was marginal, demonstrating how a large surplus has become a stable feature of the Israeli economy. This surplus also explains the strength of the Israeli shekel – and it is set to increase in 2020, when natural gas exports from the Leviathan field begin.

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Budget data for January-November 2019

8th December 2019   Bottom line: Good news on the fiscal front?! At the least, the November data contained no bad news, which is already a relative improvement. However, the surplus reported is only ‘technical’, with the true result being a deficit (see below). Nevertheless, the 12-month trailing deficit through November was stable at 3.6% of GDP and revenues rose […]

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Consumer, Producer and Housing Prices in October 2019

November 21st, 2019
Bottom line: Both the CPI (Consumer Price Index) and the MPPI (Manufacturing Producer Price Index for the Domestic Market) rose in October, in line with expectations. However, the underlying trend has decisively changed over recent months: the annual rate of increase in the CPI, which had begun to rise in late 2017 (from negative levels), peaked around 1.5% in mid-2019 and has since declined to around 0.5%. 

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November 20th, 2019
Bottom line: Much of what is happening in the economy is not good, in some cases plain bad. But the underlying trends are distorted in the quarterly GDP data by huge volatility from one quarter to the next, caused by swings in vehicle imports. Looking beyond this “noise”, it becomes clear that growth is driven only by private consumption – which is weakening – and government spending. Exports and investment are both negative factors, and even the sluggish growth of imports is bad news. In short – and despite the seemingly strong ‘headline number’ – there are increasing grounds for concern.

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