The International Monetary Fund forecast at 3.5% is more optimistic than Bank of Israel’s, which predicts the economy will grow 3% for 2015, but Bank of Israel predicts a lower unemployment rate.
IMF forecast a 1.6% inflation rate in 2014 & even less than 2% for 2015.
By Zeev Klein
The Israeli economy will grow by 3.5 percent in 2015, up from 3.2% in 2014 and 3.4% in 2013, the International Monetary Fund said in its World Economic Outlook mid-year report.
The Bank of Israel predicts growth of 3% for 2015 – Photo: Contact
The IMF outlook is more optimistic than that of the Bank of Israel, which is predicting growth of 3% in 2015, or 2.8% without production from the Tamar natural gas reserve.
However, the IMF is pessimistic about the rate of unemployment in Israel and predicts that the unemployment rate will rise from 6.2% in 2013 to 6.7% this year, and then fall to 6.5% in 2015. The Bank of Israel, on the other hand, predicts that the unemployment rate will rise more moderately, to 6.2% in 2015.
The IMF forecasts that inflation for 2014 will stand at 1.6% and will not exceed 2% in 2015, remaining within the target rate of 1% to 3%. This means that the prime interest rate set by the Bank of Israel — currently 0.75% — will remain low for the next year and a half.
The IMF report indicates a certain decrease in world economic growth, expected to total 3.6% in 2014 and 3.9% in 2015. According to the outlook, the euro bloc will continue to spin its wheels, seeing slow growth of 1.2% in 2014 and 1.5% in 2015, considerably less than the economic growth predicted for Israel.
The U.S. economy is also expected to grow at a slower rate than Israel’s: 2.8% in 2014 and 3% in 2015.
Burgeoning economic sectors in Asia, such as China and India, are expected to lead world economic growth. Asia is expected to see economic growth of 6.7% in 2014 and 6.8% in 2015.