The Israeli economy continues to improve, figures from the Central Bureau of Statistics released Sunday said. According to the report, the Israeli economy grew by an annualized 5.1% during the second quarter of 2013, between April and June. Earlier forecasts had said that at best, the economy would grow by just 3% this year.
The figures show a sharp acceleration in economic activity during the period. In the first quarter of 2013, the economy grew at an annualized 2.7%. In the last quarter of 2012, the annualized growth was 3.1%.
The main reason for the sharp growth, analysts said, was a strong increase in consumer spending. Spending increased significantly on purchases of big ticket items, like homes and cars. The analysts said that many Israelis decided to make major purchases ahead of schedule, to avoid the 1% increase in VAT (value added tax) that was implemented at the end of June.
The analysts said that now that the “spending spree” has calmed, growth in the third and fourth quarters was likely to return to the levels predicted by economists. There was only a slight increase in exports and investments during the second quarter, indicating that the economy's fundamentals have not changed, they said.