Israel’s GDP shrinks 7.1% in Q1, sharpest drop in 20 years

Israel’s GDP contracted by 7.1% in the first quarter of 2020 compared to the fourth quarter of 2019, the sharpest drop in 20 years, according to a report released by the Central Bureau of Statistics.

This decline is mainly due to the effects of the coronavirus pandemic, Xinhua news agency quoted the Bureau as saying on Monday.

In addition, a sharp decrease in passenger car imports intensified the GDP sharp fall.

According to the report, a sharp decrease of an annualized 20.3 % was registered in private consumption expenditure in the first quarter.

A significant 27.5 % drop in imports of goods and services was also seen in the first quarter, particularly an annualized 82% decline in defence imports and 85.2 % decline in tourism services imports.

Meanwhile, Israel's goods and services exports fell by 0.5% in the first quarter, following a 9.8 per cent increase in the previous quarter.

According to the central bank's special update to its macroeconomic forecast, Israel's GDP is expected to contract by 4.5% in 2020, compared with 5.3% in its April's forecast.

According to the update, Israel's GDP is expected to grow by 6.8% in 2021, compared with 8.7 % in the April forecast.