"The Economist" raises Israel 2004 growth forecast to 3.1% 

The British weekly has published an upbeat forecast for Israel, 
predicting 4% growth and lower unemployment in 2005. 

Globes
Zeev Klein  
May 18, 2004
 
British weekly "The Economist" today raised its 2004 growth 
forecast for Israel to 3.1%, from 2.3% in its previous forecast. 
"The Economist" predicts 4% growth for 2005. "The Economist" 
today published an upbeat forecast for Israel's economic 
performance for the next two years. "The Economist" says the 
recovery has been faster than expected, especially for exports, 
domestic demand, firms' confidence index and the business sector 
in general. 

A further surge in demand in Israeli exports is predicted for 
2005, along with a significant increase in investment and 
private consumption. At the same time, unemployment will fall. 

"The Economist" also believes that the economic recovery and 
budget cuts will already reduce the government deficit to below 
the 4% of GDP target in 2004. The budget deficit is predicted 
to fall to 2.8% of GDP in 2005, below the government's long-term 
target of 3%. 

"The Economist" expects inflation to rise, but to remain low, 
within the 1-3% target range. "The Economist" also supports 
the Bank of Israel interest rate policy, and believes that 
Israel's exchange rate and balance of payments will be stable, 
with a modest increase in the current account deficit as a 
percentage of GDP. 

"The Economist" predicts progress in the privatization of 
government companies in the coming months.