Israel's Q2 GDP Annualized Growth at 15.4%... 'Delta Variant' as a Future Variable

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Israel's GDP growth rate for the second quarter of this year recorded an annualized 15.4%, showing a strong economic rebound, Bloomberg reported on the 16th (local time).

This was thanks to a significant increase in consumption following the lifting of COVID-19 restrictions. Private consumption in the second quarter surged by an annualized 36.3%. A representative from a commercial bank in the capital, Tel Aviv, commented that consumption increased more than expected.

Due to the impact of COVID-19, Israel's GDP shrank by 2.5% last year. However, with the accelerated COVID-19 vaccination rollout, a strong economic rebound is expected this year. The Bank of Israel forecasts a GDP growth rate of 5.5% for this year.

However, the recent spread of the COVID-19 Delta variant is expected to be a variable. Just a month ago, Israel's daily new COVID-19 cases were in the single digits, but recently they have increased to the 700s.

Thanks to rapid vaccination, Israel lifted the outdoor mask mandate in April and the indoor mask mandate in June. But as cases increased due to the Delta variant, the government reinstated the indoor mask mandate in less than two weeks and has recently strengthened quarantine measures.

Amir Yaron, Governor of the Bank of Israel, said in an interview with Bloomberg News last week that if lockdown measures were implemented for a month, the economic growth rate this year would fall by 0.5 percentage points to 5%.

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