In light of volatile economic conditions, the Israeli Central Bureau of Statistics issued an update to growth data for the third quarter of 2024, indicating annual growth of 4% compared to its previous estimate of 3.8%.
However, these numbers do not reflect a fundamental improvement – according to the Israeli newspaper Calcalist – as general indicators remain far from stable, and reveal a clear economic slowdown compared to last year.
Weak growth and fluctuating performance
Recent updates indicate an increase in investment of 25.4% compared to 21.8% in previous estimates, but this was not enough to offset the general economic stagnation.
Despite this rise in investment, GDP in the third quarter registered a 1.1% decline compared to the same period in 2023, raising questions about the effectiveness of recent investments in stimulating the economy.
Decline in growth components
Although some sectors showed slight improvement, the decline in several key indicators reflects a clear instability in economic performance. For example, business economic output grew less than expected, at 5.1% compared to 5.4% previously estimated, according to Calcalist.
Although the decline in public spending has eased slightly, it is still down by 6.8% compared to 10.8% previously estimated.
What is most worrying – according to the newspaper – is that private consumption, which is a fundamental pillar of economic growth, rose by only 8.2%, which is lower than the previous estimate of 8.6%, which indicates continued consumer caution and low consumer confidence.
Real estate and high-tech did not achieve the expected improvement
According to the report, the increase in investment is due to a 14.6% growth in the high-tech sector, which appears positive on the surface, but it came at the expense of other investments such as intellectual property, which rose by only 8% compared to 14.1% in previous estimates. , which reflects weak innovation and research activity.
As for the construction sector, it witnessed an increase in investment in housing construction by 35.3% compared to 29.4% in previous estimates, in addition to an increase in investment in non-residential buildings by 27.3% compared to 19.5%.
However, these numbers may give a misleading picture, as investment levels in the construction sector are still 19.7% lower compared to last year, which may indicate a long-term slowdown in the real estate sector, according to the newspaper.
Foreign trade and export are in crisis
One of the most worrying aspects – according to Calcalist – is the performance of exports, which decreased by 6.5% compared to the third quarter of 2023 (excluding exports from the startup sector and diamonds), reflecting a clear decline in global demand for Israeli products.
These numbers confirm the continuing challenges facing foreign trade, amid an unstable economic environment, Calcalist says.
Gloomy look
Despite attempts to present the data in a more optimistic tone, the reality is that GDP is still 1.1% lower than last year, while business output suffers a 3.1% decline, according to Calcalist.
While private and public consumer spending rose by 3.5% and 14.2%, respectively, this does not reflect a real recovery as much as it indicates increased government spending to compensate for the economic decline, according to the newspaper.
The updated figures – published by Calcalist – reveal an economy suffering from clear structural disorders, with a slowdown in growth, weak consumption, a decline in exports, and a decline in investments in basic sectors.
As these challenges continue, it appears that the Israeli economy is still stuck in a phase of uncertainty, raising questions about its ability to achieve a sustainable recovery in the near future.
