What does this statistic mean for the Israeli economy? 6.5 million Israelis worked in the labor force on Monday, a slight decrease from last week’s figure of 6.7 million Israelis. However, the unemployment rate stood at 3.2% on Monday morning, according to figures released by the Central Bureau of Statistics. The ILO report released earlier this year showed that Israel’s working population decreased by 120,000 in 2018 when compared to 2017, due to retirement and a low birthrate.
Israel’s Population Growth
Israel’s population growth is among the highest in the world. The country’s fertility rate of 2.1 is more than three times the global average, and it has one of the lowest mortality rates in the world…
Israel’s population density is also among the highest in the world. Only a handful of countries have higher densities, most notably Russia and China. The high population density is due to Israel’s limited land area and its preference for living in densely populated areas…
Religious beliefs are also a factor in Israel’s high population growth. Jews are prohibited by Jewish law from having more than two children, which combined with Israel’s strong familial ties results in many families having at least three children…
Despite its high population growth, Israel faces some challenges due to its crowded environment. The government has been trying to address these challenges by expanding access to health care and education, as well as investing in infrastructure such as airports and roads…
Monday’s Close Followed a Mixed Pattern for the Central Bank
The Bank of Israel’s monetary policy committee decided to keep the interest rate at 0.00% on Monday, as expected. This follows a mixed pattern for the central bank in recent days. On Friday, the committee announced that it was considering increasing the interest rate, but later reversed course and said that it would keep the rate unchanged. Yesterday’s meeting was also inconclusive, with no change in policy announced. Yesterday’s closing price of equity shares was $27.68, leaving the Tel Aviv Stock Exchange (TASE) blue chip index down 0.3% overall for the day. The banking sector (-2%) led decliners on the TASE while technology (-1%) and tourism (-1%) were among the leaders in growth on Monday…
Yesterday’s decision by the Bank of Israel to keep its interest rate unchanged has left investors scratching their heads as to what direction it might take from here… While we don’t expect any drastic changes in policy anytime soon, yesterday’s mixed signals leave us feeling cautiously optimistic about where things are headed next.
The Economic Outlook
The Israeli economy is expected to grow by 2.5% in 2017, according to the Bank of Israel’s most recent report. However, this growth will be largely driven by exports and consumer spending, which are both forecast to increase by 3%. Meanwhile, domestic demand is projected to grow at a slower pace of 1.8%. The unemployment rate is currently sitting at 5%, but it is expected to decline in the coming years as the country enters a period of robust economic growth. Inflation is also expected to moderate over the next few years due to rising wages and food prices.
CPI Inflation Still Below the Target Range
Since the government of Prime Minister Benjamin Netanyahu came to power in 2009, CPI inflation has been below the target range of 2% to 3%. Inflation has averaged 1.5% over this period, making it one of the more successful policies pursued by the current government.
The main reason for this lower inflation is the low global oil prices, which have had a major impact on Israeli consumer prices. The decrease in global oil prices has had an especially large impact on gasoline prices, which have fallen by 50%. This has led to a decline in overall food and energy prices as well.
Another factor contributing to the low inflation rate is the slowdown in Israel’s economic growth rate. Between 2003 and 2013, Israel’s average annual economic growth rate was 4.2%. This growth slowed down to 2% between 2013 and 2014 and only 1% between 2014 and 2015. This slowdown is mainly due to continuing high unemployment rates and weak investment activity. Consequently, demand for goods and services has not increased as much as expected, which has lowered prices across the board.
Despite these factors, CPI inflation is still below the target range of 2% to 3%, indicating that the current policy of low inflation is working well. The Bank of Israel expects CPI inflation to reach 2% by 2020 and keep it there until 2025.
The Bank Rate Remained Unchanged at 3.25%
The Bank Rate Remained Unchanged at 3.25% on Monday as the decision was taken to continue with the current monetary policy stance. The Bank of Israel sent a letter to the government stating that despite recent signals implying that an easing of monetary conditions is forthcoming, there is no reason to change the course at this time. This decision comes after two months in which there were some changes in economic indicators, including a rise in joblessness and a slowdown in exports, which led economists to believe that an easing of policy might be necessary. Despite these developments, the central bank decided not to lower the interest rate despite noting that they are monitoring developments closely.
HIKU Indexes Reached All-Time Highs in January
In January, the HIKU Index reached all-time highs, indicating that Israeli investors are increasingly looking to invest in and trade digital assets.
This trend is likely due to the growing popularity of cryptocurrencies and blockchain technology, as well as Israel’s position as a leading global startup ecosystem.
Israeli startups have been at the forefront of this new wave of innovation, and the country’s strong economy continues to support investment in innovative companies.
As a result, Israeli businesses are booming and attracting global attention. The HIKU Index is one indicator of this growth, and it continues to demonstrate that Israeli companies are leading the way in terms of innovation and investment potential.