from the May 2007 issue

IMF ups Israel growth forecast

The IMF has raised its growth outlook for Israel by 0.3 percentage points in a new World Economic Outlook report published recently.

The IMF previously predicted 4.5% growth. It now predicts 4.8% growth in 2007, and 4.2% growth in 2008. The IMF's growth forecast for Israel is one of the highest for developed countries as the IMF categorizes Israel.

The IMF also predicts 0.1% deflation for Israel this year; the only developed country for which it predicts this. The IMF projects that Israeli inflation will only reach the government's inflation target midpoint of 2% in 2008. For the sake of comparisons the IMF average inflation rate for developed countries in 2007 is 1.8%. The IMF predicts that Israel's unemployment rate will fall to 7.5% of the civilian labor force in 2007 and 7.2% in 2008, down from 9% in 2005 and 8.4% in 2006.

Israel's unemployment rate is still among the highest among developed countries; only Germany, France, Spain, Belgium, and Greece are projected to have higher rates.

Reprinted from the Israel High-Tech & Investment Report May 2007

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