The Bank of Israel cut its forecasts for economic growth this year and next, citing increased uncertainty about the global economy and a decline in the rate of growth in world trade.
Uncertainty regarding the continuation of the global economic recovery increased significantly since the previous forecast was prepared, at the end of July, which was published as part of the Monetary Policy Report for the first half of 2011. Investment banks and international entities are revising their forecasts downward, under the assessment of an increased probability of a global recession, even if one not as strong as in 2008–09. In its September outlook, the International Monetary Fund (IMF) pointed to two developments on which it based these estimates.
One development is that growth rates in advanced economies since the beginning of the year were lower than expected.
The other development is the increased fiscal and financial uncertainty, especially since August, against the background of debt problems at some of the members of the European Union (EU)—problems seen as a threat to the EU itself. Against this background, the IMF revised downward its global growth forecast, to 4.0 percent for each one of the years 2011 and 2012. By comparison, in its previous forecast (from June 2011), the IMF forecasted global growth of 4.5% for 2012.
GDP growth is expected to be 4.7% in 2011 and 3.2% in 2012. The forecast for 2012 was revised downward from the previous forecast of 3.9%, which was published in the last Monetary Policy Report. The revised expected growth rate is close to the multi-year average. The slowdown of the growth rate, relative to 2011, stems from assessments of a slowdown in the pace of growth of demand. The slowdown in the rate of demand growth is led by exports, which in 2012 are expected to grow by only 1.7%, against the background of expectations of a slowdown in global trade and activity.
Imports are expected to grow 3.0% in 2012, significantly below the pace of the past two years. The composition of expected growth in sources—which is reflected in the slower growth which will be seen primarily in imports, and to a lesser degree in output—is based on the composition of the expected growth of demand, specifically its sub-components. Moreover, it should be noted that the accelerated growth of imports in 2010–11 was remarkably higher than the multi-year average, and comes after a very sharp drop in 2009 (both in absolute terms, as well as in terms of import to output ratio).
Exports excluding diamonds and startup companies are expected to expand 1.7% in 2012, compared with a forecast 3.9% this year and 10.6 percent in 2010, the bank said. Exports make up some 40% of the economy.
Source: www.port2port.com
Uncertainty regarding the continuation of the global economic recovery increased significantly since the previous forecast was prepared, at the end of July, which was published as part of the Monetary Policy Report for the first half of 2011. Investment banks and international entities are revising their forecasts downward, under the assessment of an increased probability of a global recession, even if one not as strong as in 2008–09. In its September outlook, the International Monetary Fund (IMF) pointed to two developments on which it based these estimates.
One development is that growth rates in advanced economies since the beginning of the year were lower than expected.
The other development is the increased fiscal and financial uncertainty, especially since August, against the background of debt problems at some of the members of the European Union (EU)—problems seen as a threat to the EU itself. Against this background, the IMF revised downward its global growth forecast, to 4.0 percent for each one of the years 2011 and 2012. By comparison, in its previous forecast (from June 2011), the IMF forecasted global growth of 4.5% for 2012.
GDP growth is expected to be 4.7% in 2011 and 3.2% in 2012. The forecast for 2012 was revised downward from the previous forecast of 3.9%, which was published in the last Monetary Policy Report. The revised expected growth rate is close to the multi-year average. The slowdown of the growth rate, relative to 2011, stems from assessments of a slowdown in the pace of growth of demand. The slowdown in the rate of demand growth is led by exports, which in 2012 are expected to grow by only 1.7%, against the background of expectations of a slowdown in global trade and activity.
Imports are expected to grow 3.0% in 2012, significantly below the pace of the past two years. The composition of expected growth in sources—which is reflected in the slower growth which will be seen primarily in imports, and to a lesser degree in output—is based on the composition of the expected growth of demand, specifically its sub-components. Moreover, it should be noted that the accelerated growth of imports in 2010–11 was remarkably higher than the multi-year average, and comes after a very sharp drop in 2009 (both in absolute terms, as well as in terms of import to output ratio).
Exports excluding diamonds and startup companies are expected to expand 1.7% in 2012, compared with a forecast 3.9% this year and 10.6 percent in 2010, the bank said. Exports make up some 40% of the economy.
Source: www.port2port.com
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