Foresees growth of 3.5%, business output up 4.8% and unemployment down to 9.9%.

Economic growth will reach 3.5% in 2005, business production will increase by 4.8% and standard of living (individual consumption) will increase by 2.2%. Exports will increase by 7.4% and investments by 7.1%. These optimistic figures were part of the Governor of the Bank of Israel’s forecast for 2005.

The bank’s forecast was similar to the forecast provided recently by the Treasury. The Treasury’s forecast assessed that GDP would increase by 3.8%, business production by 5.3% and individual production by 2.1%. Bank of Israel foresees sharper increases in investments, exports and standard of living.

The complete figures for the Bank of Israel’s forecast for 2005 are as follows: GDP will increase by 3.5% and then to 3.7%; business production will increase by 4.8% and then to 5.2%; standard of living will increase by 2.2% and then to 2.4%. Investments in the economy will increase by 7.1% and exports will increase by 7.4% and then up to 9.1%. Imports to increase by 6.6%. Unemployment rates will decrease to 9.9%, compared to 10.6% – the number of unemployed will drop by 13,000 to 271,000 people.

“Economic growth is dependant on a number of factors – continued recovery in the international markets, a calm security situation and a decrease in public debt. An essential part of fulfilling our economic potential is an increase in public spending, a reduction in public debt and long-term low interest rates. This is the only way to ensure price stability and relatively low interest rates,” the Bank of Israel stated.

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