GDP growth expected to reach a robust 5% saar in Q1 2019
Economic data released last week supports our assessment of robust growth in Q1 2019, likely to reach 5% saar. Exports of both merchandise and services were up sharply in Q1, employment growth was strong and new vehicle purchases surged before higher taxation. Robust growth strengthens our view that a rate hike on May 20 is increasingly likely, assuming April's CPI (1.5% y/y) does not surprise on the downside. Politics: Following two days of escalation in violence with Gaza a cease-fire was reached early this morning. Netanyahu can now devote his energies to coalition formation, which is no easy task.
Highlights:
Recent economic data points to robust growth in Q1 2019:
- The composite index of the economy increased by 3.6% saar in Q1 2019, accelerating from 3% in Q4 2018.
- Manufacturing is up by 8.4% saar in December-February.
- Unemployment declined in Q1 2019 to 3.6% (ages 25-64) from 3.7%.
- Employment growth surged by 2.7% saar in Q1 2019.
- Service exports are up 10.9% cumulative in the January-February.
- Trade data point to a declining trade deficit in Q1 2019.
- Incoming tourism is up 9.6% saar in Q1 2019 (although it declined in April).
- Purchases of new vehicles surged in March before higher taxation kicked in in April.
Now read on...
Register to sample a report