Israel’s Economy Sinking

August 3, 2009

According to data published by Israel’s Central Bureau of Statistics, the economy slumped at a rate of 3.6% in the first quarter of 2009. The Bank of Israel forecasts that the Gross Domestic Product growth will shrink to 1.5% this year, creating the worst recession since the state was founded in 1948. Foreign investment is down by 30%, exports have fallen 46%, and imports are down 63%.

Unemployment is also set to rise. High-tech companies are shedding jobs and Israeli start-ups acquired by US giants are closing. “Over the past year, 13,000 industrial workers have lost their jobs, and 8,000 more employees will be fired from industrial factories by the end of 2009 unless global demand recovers,” reported the chairman of the economics committee of the Manufacturers’ Association. The employers predict that unemployment in Israel will hit 8.7% by the end of the year, with 250,000 people out of work.

The government’s economic “package deal” is designed to soften the blow by pouring new investment into tourism and infrastructure projects to attract foreign cash and build the basis for future economic growth.

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