Photo Credit: Flash 90

Israel’s economy has contracted in the first quarter of this year, due to declines in exports, according to a report Monday (May 16) by the Central Bureau of Statistics.

Government spending dropped by seven percent. Exports dropped by 6.1 percent, not including start-ups and diamonds. Private spending declined by 0.7 percent. Imports rose by 17.3 percent.

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Gross domestic product (GDP) shrank an annualized 1.6 percent in the period Jan. 1 to March 31, as compared to the prior three months.

The inflation rate reached four percent last month – the first time it has hit four percent since 2011.

The news comes despite predictions by analysts polled by Reuters who expected to see a two percent rise.

All this means that Israel’s economy has fallen by three percent, after having grown in 2021 by 8.2 percent – a 21-year high rate.

The good news: investment rose by 3.3 percent in the first quarter, all of it in residential construction, and the Bank of Israel has forecast the country’s economy will grow 5.5 percent this year.

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Hana Levi Julian is a Middle East news analyst with a degree in Mass Communication and Journalism from Southern Connecticut State University. A past columnist with The Jewish Press and senior editor at Arutz 7, Ms. Julian has written for Babble.com, Chabad.org and other media outlets, in addition to her years working in broadcast journalism.