Israel’s economy continues to sputter in line with the global economic slowdown.
Israel is facing a severe deficit crisis. The Central Bureau of Statistics recently reported that the balance of payments deficit soared steeply, due to the severe reduction in exports, foreign investments, revenues from tourism, and unilateral transfers to the Israeli economy. The deficit totaled $3.3 billion during January through September 2001, compared with only $1.3 billion in the corresponding period in 2000. This marked an increase of 253 percent.
Foreign investments plummeted 62 percent to only $3.2 billion. Israelis' investments overseas declined since the beginning of the year, to only $1.2 billion. The goods trade deficit amounted to $3.1 billion in January-September
Meanwhile, the International Monetary Fund (IMF) recently slashed the growth forecast for Israel to only 1.7 percent from the previous forecast of 2.2 percent. The figures are lower then the official forecast of the Finance Ministry, which estimated that the Israeli economy would grow by approximately 2 percent. The IMF also estimated that inflation would increase by approximately 1.8 percent next year.
Further cause for concern regarding Israel’s economy stems from Central Bureau of Statistics data that unemployment rose to 9.4 percent of the civilian labor force. The number of unemployed rose by 2,500 last month to 236,000, the highest unemployment rate since 1998. The rise last month marked the seventh consecutive monthly increase as the unemployment rate continues to steadily increase by 0.1 percent in each month since March.
Israel’s Finance Ministry failed to garner enough support to pass its revised 2002 budget. Several ministers stressed the need for more time to review the new proposed measures. (Albawaba.com)
© 2001 Al Bawaba (www.albawaba.com)
