Israel’s previously dampened economy exploded in the second quarter, posting an annualized growth of 15.4%.
After shrinking 2.5% in 2020, due to coronavirus-related lockdowns and government restrictions, the economy has shown its reliance. Low interest rates, a thriving high-tech market, increased consumer confidence, and swelling in car import numbers have led to the growth.
Israeli consumers have shown their lack of concern with consumption expenditures by increased spending at a rate of 36.3% in the second quarter, according to the Central Bureau of Statistics.
Upon publication of other OECD countries’ second-quarter growth, Israel proved its unique growth position; outperforming the USA, Canada, Belgium, and Austria.
Nearly 80% of Israel’s annualized growth was due to car imports, which spiked overall GDP growth in the second quarter by 12.4%.
Equally, the general population reacquired sufficient consumer confidence, resulting in a 34.1% annualized increase in private consumption per capita in the second quarter.
Increased consumer spending directly reflects the influence of the government’s earlier intervention, lockdowns, and heightened consumer restrictions.
Exports of Israeli goods and services also posted a double-digit increase in the second quarter. Excluding diamonds and startups, Israel’s exports rose by 14% in the second quarter. The export of services posted the largest growth rate at 30.2%.
As the nation enters the third quarter of 2021, the average Israeli consumer appears to have maintained confidence in heightened rates of spending. In the first half of the year, the Israeli economy grew by 5.3% on an annualized basis, compared with the second half of last year.