Preliminary estimates show unexpectedly strong growth of 3.8%, year-on-year, in the third quarter of 2024, according to reports from the Central Bureau of Statistics. GDP increased by 0.9% compared to the previous quarter.
These latest numbers are considered very encouraging compared to the growth numbers in previous quarters. In the second quarter of 2024, GDP increased by only 0.3%, or 1.2% year-on-year, reflecting negative per capita growth.
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Behind the improved data on Israel’s economic performance is a sharp increase in both business output and the resulting growth of private consumption. Business products growth reached 5.4% in the third quarter, and private consumption growth reached 8.6% year-on-year. On the other hand, there was a significant decline in government spending of 10%, indicating a significant decline in government spending compared to the second quarter.
GDP per capita also showed a positive trend, increasing by 2.6% year-on-year. When the growth is deducted from the natural population increase of 2% annually, there is still positive growth in the third quarter, in contrast to the second quarter. So, as the war entered its second year, Israel avoided entering a recession by recording negative growth in two consecutive quarters.
A significant increase in imports to Israel
Central Bureau of Statistics data also showed a 21.8% rise in investments in fixed assets in the third quarter. The bulk of the increase in investments is due to a rise in investment in residential construction, which rose by about 30% in the third quarter. Despite the increase, investment numbers in residential construction are still low compared to the numbers for the third quarter of 2023.
Exports of goods and services rose by 5.2% in the third quarter of 2024, on an annual basis. Services exports rose by 6.6%, while exports of services that do not include tourism but include startups rose by 3.7% year-on-year.
Imports to Israel in the third quarter, excluding defense imports, increased by 26.7%. Total imports of goods and services increased by 9.8% in the third quarter.
Published by Globes, Israel Business News – en.globes.co.il – on November 17, 2024.
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