Israel’s GDP shrinks 7.1% in Q1, sharpest drop in 20 yrs

An Israeli woman wearing mask is seen in the Israeli city of Bat Yam near Tel Aviv.

Jerusalem, (Asian independent)┬áIsrael’s GDP contracted by 7.1 per cent in the first quarter of 2020 compared to the fourth quarter of 2019, the sharpest drop in 20 years, according to a report released by the Central Bureau of Statistics.

This decline is mainly due to the effects of the coronavirus pandemic, Xinhua news agency quoted the Bureau as saying on Monday.

In addition, a sharp decrease in passenger car imports intensified the GDP sharp fall.

According to the report, a sharp decrease of an annualized 20.3 per cent was registered in private consumption expenditure in the first quarter.

A significant 27.5 per cent drop in imports of goods and services was also seen in the first quarter, particularly an annualized 82 per cent decline in defence imports and 85.2 per cent decline in tourism services imports.

Meanwhile, Israel’s goods and services exports fell by 0.5 per cent in the first quarter, following a 9.8 per cent increase in the previous quarter.

According to the central bank’s special update to its macroeconomic forecast, Israel’s GDP is expected to contract by 4.5 per cent in 2020, compared with 5.3 per cent in its April’s forecast.

According to the update, Israel’s GDP is expected to grow by 6.8 per cent in 2021, compared with 8.7 per cent in the April forecast.