Israeli economy surprises with pace of growth

NEW YORK (JTA) – Israeli economic growth unexpectedly accelerated to its fastest pace in more than two years.

Exports and consumer spending increased, helping to sending up growth in the second quarter by an annualized 4.7 percent, Bloomberg reported.

The expansion rate rose from a revised 3.6 percent in the first quarter, the Jerusalem-based Central Bureau of Statistics said Monday on its website.

The median forecast of six economists surveyed by Bloomberg had predicted growth of 2.9 percent. The statistics bureau reported last month that the economy grew a preliminary 3.4 percent in the first three months.

“This is really an economy running on all pistons,” said Jonathan Katz, a Jerusalem-based economist for HSBC Holdings Plc, who forecast 3.7 percent growth. “Down the road, the Bank of Israel will have to increase interest rates. This is clear to them, clear to everyone, and the pace may surprise many.”

The Israeli economy’s rebound from the global financial crisis has been powered by exports, which make up nearly half of gross domestic product.

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