According to today’s release from the Central Bureau of Statistics, Israel’s GDP grew by 6.5% in 2022, exceeding the forecasts of both the Ministry of Finance and the Bank of Israel.
After a more modest expansion of 2.1% on an annualized basis in the third quarter of 2022, GDP growth of 5.8% in the final quarter of the year pushed the annual growth figure higher.
After a decline of 1.9% in 2020 due to the COVID pandemic, the economy expanded by a whopping 8.6% in 2021.
GDP per person increased by 4.4% to NIS 184,000 in 2022, after increasing by 6.8% in 2021, when accounting for the additional 2% in population growth.
According to the report, Israel’s GDP per capita growth was the second best after Ireland among the 14 OECD countries.
Israel’s private consumption increased by 7.5% in 2022, with a 5.5% increase in per capita private consumption. However, this figure does not take into consideration the unusually high inflation of 5.4% that was recorded in the last twelve months.
The Bank of Israel is expected to raise interest rates when it meets on Monday. With a strong GDP and inflation at a twenty-year high, policymakers are likely to take a more hawkish stance and raise interest rates by 50 basis points rather than 25 as originally anticipated.
As the nation continues to deal with various economic challenges, the Bank of Israel projects a lower rate of growth this year. According to its latest forecast, the economy is expected to expand by 2.8%.