Israel’s economy rebounded in the third quarter of the year, growing by an annualized 37.9%, led by a surge in consumer spending, exports and investments, after the coronavirus pandemic hit the economy hard in the first half of the year.
According to data published by the Central Bureau of Statistics on Monday, the preliminary gross domestic product grew by 37.9% for the July-September period compared to the previous quarter, well above a 24% growth forecast in a poll of economists by Reuters.
Private consumption in the third quarter surged 42% compared to the previous quarter in 2020, and exports surged 44.6%, while there was a 7.3% rise in investments in fixed assets.
Compared to the third quarter last year, however, the GDP for the third quarter of 2020 declined by 1.4%, and in the first nine months of 2020 the economy contracted by 3% compared to the same period a year earlier.
Israel, like nations globally, has been struggling with the pandemic, and has had to implement two economic lockdowns — in March and in September — to keep the virus in check. Stores have gradually begun to reopen this month. The data for the third quarter reflects the state of the economy as it exited the first lockdown, and before the full impact of the second lockdown, which started on September 18.
On Friday, S&P left Israel’s credit rating unchanged at AA- with a stable outlook, and forecast the economy will contract this year by 5% because of the pandemic. It estimated a recovery in 2021, with the GDP rising by 4.5%.