Israel’s economy to grow below expected 3% in 2023 – Ministry of Finance | Bot To News

JERUSALEM, Dec 12 (Reuters) – Israel’s economic growth is expected to slow sharply to 3% in 2023 after rapid growth in the previous two years, the finance ministry said on Monday, lowering its estimate from 3.5%, citing more restrained consumers and government spending.

Consumer spending – more than half of Israel’s economic activity – is expected to slow to 3.2% growth in 2023. Exports, another key driver of growth, are expected to grow by 4.2 percent next year.

This year, boosted by higher consumer spending, expected by 7%, and a jump in exports (+11.8) and investment (+10.9%), growth is forecast at 6.3%, revised according to the ministry’s previous estimate , which was 4.9% in July.

Israel’s economy grew by 8.6% in 2021 in what the ministry said was a recovery from the COVID-19 pandemic.

Inflation is said to be 5.1% at the end of 2022, but will ease back to 2.7% by the end of next year, bringing it back within the official annual inflation range of 1-3% amid aggressive rate hikes mer Bank of Israel.

To combat inflation and the high cost of living, the central bank raised its benchmark interest rates to 3.25% from 0.1% in April. The rate should reach as much as 4%.

The Central Bank of Israel will decide on interest rates again on January 2, and at the same time it will publish updated macroeconomic forecasts. In October, it forecast economic growth of 6 percent in 2022 and 3 percent in 2023, with inflation of 4.6 percent this year and 2.5 percent next year.

Reporting by Steven Scheer Editing by William Maclean

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