Israelis enjoying end of recession

February 2010 saw a spending spree in Israel. Purchases of washing machines, motor bikes, fridges and cars all rose in the tens of percentage points.

Unemployment is on the way down. Clearly, there is more money around.

Economists always worry about a consumer led boom. Fortunately, there are other encouraging signs in parallel to these spending trends. For example, state revenue from taxation was up over 7% in January in real terms.

As for inflation, the overall pattern is seen as downwards. And even better news is that the current governor of the Bank of Israel, Stanley Fisher, is expected to receive and accept an offer to remain for a second 5-year term.

The one blip seems to be an externality, out of Israel’s control. As the Bank of Israel stated its latest survey, “negative developments in some European countries with high deficit/gross domestic product and debt/GDP ratios” posed risks to positive global growth trends.

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