The report cut the world growth outlook to 4% in 2011 and 2012, compared to a previous forecast of 4.5% for 2012
The IMF (International Monetary Fund) predicted last week that in 2011 Israel’s economy is likely to expand 4.8% this year, the same as last, compared to a previous forecast of 3.8%.
The figures were published in the September edition of the organization’s world outlook, ahead of the IMF meeting in Washington held last week.
The IMF’s 2012 growth rate forecast, however, was cut to 3.6% compared to a previous outlook of 4.8%.
The report noted that Israel’s inflation rate is expected to rise in 2011 to 3.4% due to the wave of price hikes, some stemming from taxes. In 2012, however, inflation is expected to drop to 1.6% – within the government’s target range of 1-3%.
The current account surplus will decline to 0.3% of GDP this year from 2.9% in 2010, the IMF said. The forecast for 2012 is 0.7%.
According to the report, the global economy will suffer from the renewed financial crisis in the United States and the European debt crisis. “Global activity has weakened and has become more unbalanced. Downside risks have intensified,” the IMF stated.
The report cut the world growth outlook to 4% in 2011 and 2012, compared to a previous forecast of 4.5% for 2012.
Prime Minister Binyamin Netanyahu welcomed the report’s findings saying it proved the government has been successful in managing Israel’s economy.