Israeli economic growth slowed more than expected to 2.2 percent in the third quarter as industrial exports and tourism fell.
Annualized growth decelerated from a revised 4.6 percent in the previous three months, the Jerusalem-based Central Bureau of Statistics said in an e-mailed statement today. Growth was expected at 3.5 percent, according to the median of four estimates in a Bloomberg survey of economists.
The Bank of Israel has lowered the benchmark interest rate from 3.25 percent in 2011 to 1 percent to shore up the export-dependent economy. Exporters have demanded another cut, saying the current rate is strengthening the shekel and hurting their competitiveness by making their goods more expensive abroad.
Growth is forecast to slow to 3.4 percent in 2014 from 3.6 percent this year, the Bank of Israel said in September.
“We forecast growth will slow next year because of two primary reasons, the first being exports, which are expected to be hurt by the strong shekel,” said Roy Ben Navat, economist, Halman-Aldubi Investment House. “The second problematic thing we have identified is an expected slowdown in private consumption, because a number of tax increases are expected in early 2014 and we think that will cool demand.”
The statistics bureau said exports fell 16.4 percent in the third quarter, with industrial exports, excluding diamonds, and tourism each sinking 18.9 percent. Exports in the second quarter rose 2 percent.
Imports grew 8.6 percent, compared with 6.8 percent in the previous three months, the bureau said.
Private consumption rose 5.6 percent in the third quarter, after climbing 6.2 percent in the previous three months. Government consumption increased by 4.5 percent, down from 7.9 percent.