By Erin Viner
The International Monetary Fund (IMF) has just lowered the forecast for Israel’s gross domestic product (GDP), for both 2019 and 2020. GDP is a monetary measure of the market value placed on the comprehensive production of all goods and services within a specific time period, most generally assessed on an annual basis.
According to the IMF prediction, the Israeli economy will increase to a 3.1% level during both this year and remain stable at that rate in the coming year. The assessment marks the second time this year the IMF dropped its expectations for Israel, after having adjusted its earlier expectations of 3.3% this past April.
Moreover, the IMF also slightly-lowered its prediction for Israel’s global growth to from 3.2% to 3% for 2019, which the nation’s Globes financial newspaper reported is “the lowest global growth figure since 2008.”
Professor Avi Simhon, who is the Head of the National Economic Council in Israel and the Economic Advisor to Prime Minister Benjamin Netanyahu, told TV7 that the IMF ratings are not the result of any specific issues with the Israeli economy, but rather due to the slowdown currently experienced worldwide.
He said the IMF move was not only expected, but it mirrors Israel’s own predictions made 22 months ago in January 2018, at the time the Knesset passed the 2019 state budget. In fact, the Bank of Israel dropped its own estimated 2020 growth rate in early October to 3% from its previous expectation of 3.5%, reflecting a more significant drop than that of the IMF.
When asked if the lowered IMF forecast was cause for concern, Prof. Simhon pointed out that Israel’s growth rate is still relatively good, particularly when compared with the 1.2% prediction for the European Union. A greater cause for debate, he said, regards financing of the $10.8 billion budget deficit, which could rise as high as $14 billion.