Car import delays cut Israel's Q3 growth

Israel's GDP grew by only 2.4% on an annualized basis in the third quarter of 2021, according to the first estimate of the Central Bureau of Statistics. "Bloomberg" had predicted 3.8% growth in the third quarter.

The unexpectedly low third quarter growth figure is explained by the fall in car imports in the third quarter of 2021 compared with the second quarter and the fall in taxes on those cars. Without the influence of tax on imports, third quarter growth would have been 3.5% on an annualized basis.

The reopening of the economy and the return to routine after the Covid crisis have caused volatility in economic data like GDP growth figures. In the second quarter the economy grew by 13.7% on an annualized basis, after contracting 6.5% in the first quarter.

As a result of the sharp fall in car imports due to supply chain difficulties, private consumption in Israel only grew by 0.7%, on an annualized basis, in the third quarter. Without car imports, private consumption rose by 5.1% on an annualized basis in the third quarter.