JERUSALEM (Reuters) – Israel’s economy is likely to grow by 4.6% this year, the Finance Ministry said on Sunday in a forecast reliant on continuation of rapid COVID-19 inoculations and a drop in the infection rate.
In a lower probability scenario in which the health environment deteriorates because of new virus mutations or vaccinations taking longer than expected, forcing further lockdowns, the economy would grow by only 1.9%, the ministry said, adding that its projection for 2020 is a 3.3% contraction.
Israel has been a world leader in vaccinating its population against the coronavirus.
“The economy will recover at the rate that had characterized the sub-prime (2008 financial) crisis,” the ministry said of its main scenario, assuming “vaccination of the population in the first half of 2021 when, in this period, there are still limited health restrictions”.
The Bank of Israel has estimated a contraction of 3.7% for 2020 and growth of 6.3% in 2021 if the rapid vaccination pace is maintained. That would fall to 3.5% growth in a slow-inoculation scenario.
According to the ministry, Israel’s economy fared relatively well in 2020 and outperformed an OECD average of a 5.5% contraction. It cited minor damage to exports thanks to high-tech exports.
It noted, however, that unemployment remained high at 15.4% in 2020 and is expected to fall to 8.6% in 2021 in its base scenario and to 11.6% in a more pessimistic projection, with a decline in the average wage in either case.
Separately, in a third estimate, the Central Bureau of Statistics said the economy surged 39.7% in the third quarter of 2020 on an annual basis compared with the second quarter, reflecting an economy that was mostly open during the summer between lockdowns. The economy had contracted by 29.9% in the second quarter.
Another slight contraction is expected in the fourth quarter owing to lockdowns, while exporters have said they are also suffering because of an appreciation of the shekel. The currency last week reached 3.11 against the dollar, its strongest in 24 years.
The Bank of Israel, which has been reluctant to lower short-term interest rates beyond its current 0.1% rate on a view that rapid vaccinations will boost the economy, responded on Thursday with a pledge to buy $30 billion of foreign currency in 2021, up from $21 billion in 2020.
The shekel has since weakened to 3.27 against the dollar.
Growth in the July-September period was driven by sharp gains in exports (59.7%), private spending (42.3%) and investment in fixed assets (17.2%).
(Reporting by Steven Scheer; Editing by David Goodman)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
