Israel, the tiger of the middle east

There are some percentage of growth of the GDP that classify a country as the tiger of a certain macro-area. The acceleration of the Israeli economy in the last quarter of 2014 , sets this country in the circle of the very fast growing economies. The expansion of the economy was 7.2% in the last quarter. Many economists dedicate this acceleration, to the growing exports towards the US and the rest of the world.

The strong dollar has increased the demand for the high technology products of Israel. The $278 billion economy of Israel is expected to grow more than 3.5% for year 2015. The economy based on export will continue to benefit from the strong dollar and will continue to sell high technology products in the US, because the demand from this country, is expected to rise fast.

Also the domestic consumption has been determinant in the growth of the GDP, specially the purchases of new cars. There are strong signals coming also from the real estate market. The purchases of homes are estimated to be around 24% higher in the first months of the new year. However there are still around 25.000 apartments waiting to be sold. For the moment the offer has kept the prices of the properties flat but if the pressure on the demand will continue to rise, as analysts expect for the next year, very soon the prices will start to go up. The rise in home prices will continue to keep the propensity to consume high.

Considering the actual big problem in the middle-east, Israel is one of the few countries with such a percentage of economic growth. Many Arab states are suffering from the low price of oil and many other countries are suffering from the political destabilization. This hasn’t definitely helped the economy of Israel, but thanks to the high interaction between this market and the Western markets, the economy has benefited, in these tough times for the region.

The financial markets in Israel have performed very good in the last two years. One of the most important, the TA-25 index has almost reached 1.700 points. One year ago this index was around 1.400 points. The performance of the most important companies of the Tel-Aviv stock exchange is more than 21%. The markets and the economy of Israel have benefited very much from the easing of monetary policy that the Bank of Israel has undertaken in the last years.

Israel continues to be the most stabile economy in the Middle-East because the macro-indexes of the economy are some of the best in the region. The low unemployment rate, despite the high migration, the inflation under control, the low deficit of the government budget and the low foreign debt represent a solid base for the growth of the economy in the future.

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