The Israeli economy's solid performance is consistently besting other major economies worldwide, a recent macroeconomic review by a top analysis concluded.
Harel Insurance and Finance's Economic And Research Department Head Ofer Klein did, however, qualify his conclusion, saying that in light of the slowing global economy, he believes the Israeli economy will grow by only 3% in 2020.
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Israel's initial growth figures for the fourth fiscal quarter of 2019 defeated estimates, with strong annual growth of 4.8% that, after deducting import duties, came to 3.3%.
For comparison, initial growth figures for the UK's Q4-2019 showed no economic growth at all, as the British economy avoided posting negative growth data only due to a rapid increase in inventories. The German gross domestic product reflected only 0.1% annual growth and Japan had a devastation Q4, as its GDP shrunk by an annualized 6.3%.
Klein believes a renewed interest in inflation rates may soon emerge, in part due to the coronavirus outbreak.
China is Israel's second-largest importer, with $6.7 billion in 2019, accounting for 8% of the total Israeli imports.
The disruption of regular imports from China – if still in effect in a few weeks – "could bring about a decrease in inventories and even a shortage of certain products, which and will require finding alternatives that are likely to be more expensive," he said.
Klein further argued that the Bank of Israel was likely to decrease interest rates in the coming months.
