Israel's economy set to slow in 2001
Israel's economic growth is set to slide sharply in 2001 due partly to the Israeli-Palestinian violence that has raged for nearly five months, according to government projections published on Monday, February 26.
The finance ministry has lowered its economic growth forecast for the year to between two and three percent from an earlier projection of 4.5 percent, a steep drop from the six percent rate of 2000, one of the highest in Israel's economic history.
Israel's standard of living as measured by per capita gross domestic product (GDP) is forecast at $17,500, it said in a report.
The nation's economy has been hit not only by the Israel-Palestinian unrest which has hammered the tourism and construction sectors and thrown some 64,000 people out of work, but also the slowdown on international markets.
International credit rating agency Moody's has also downgraded its 2001 forecast for economic growth to between five and six percent due to the effects of the violence on tourism, construction and agriculture, the Haaretz newspaper said.
Construction, which makes up 8.5 percent of Israel's economy, has been hard hit by closure of borders between Israel and the West Bank and Gaza Strip to Palestinian laborers, it said.
Moody's reported that Israel's successful high tech and start-up industries, which comprise 20 percent of the nation's economy, have withstood the unrest better than other sectors. — (AFP, Jerusalem)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)