The Central Bureau of Statistics announced that the GDP increased by 6.8% in the second quarter of 2022 compared to the first quarter of the year. After experiencing a 2.7% decline in Q1, the data shows a recovery in the Israeli economy. The rate of growth is the same as the CBS’s first estimate from a month earlier.
According to CBS, the second quarter saw a return to normal life routine, which had an impact on the growth of the gross domestic product. As a result, services like catering, hospitality, air transportation in the private consumption component as well as tourism significantly boosted GDP in this quarter.
In an international comparison against 13 advanced countries, which was attached to the CBS publication, Israel ranks first in terms of GDP growth compared to the corresponding quarter last year. During this period, Israeli GDP jumped by 7.4%, compared to 6.2% in Austria, 5.4% in the Netherlands, 4.1% in Sweden, 3% in South Korea and only 1.7% in Germany and the United States.
Another possible factor in the GDP’s jump is inflation. The overall prices of goods in the economy increased as a result of price hikes across the board ranging from food to energy. However, Israelis were not deterred by increasing costs and continued to consume at the same levels.
Spending rose across the board, in the public as well as in the private sector. On an annualized basis, public consumption expenditure rose by 4.4% in the second quarter of 2022. However, the government’s defence spending declined by 20.8% annually, which could have pushed GDP figures even higher.
Private consumption expenditures climbed by 10.7% annually in the second quarter of 2022. Israelis spent 4.3% more money in the second quarter on current costs, such as fuel, electricity, food, and housing.
On an annual basis, the volume of exports of services climbed by 20.6% in the second quarter. This resulted in a rise in taxes collected since the year’s commencement. Exports of tourism-related services increased significantly as well, but they are still below their levels from the year before the corona pandemic.