Finance Minister Yuval Steinitz
Finance Minister Yuval SteinitzIsrael News photo: Flash 90

The Finance Ministry on Sunday released an optimistic forecast for economic growth in Israel for 2013. The forecast shows the economy growing 3.5%, half a percent more than senior economists quoted in the media recently had been predicting. And the forecast for 2014 – with 3.9% growth is even better.

The Ministry's growth prediction is also more optimistic than that predicted by the Bank of Israel. In a recent press conference, BOI chairman Stanley Fischer said that he expected the economy to grow by 3%. The Bank is expected to release an updated growth forecast next week, when it publishes its next interest rate.

A senior Treasury official said that at least part of the economic growth will come with the expected integration of the natural gas off Israel's shores into the country's energy economy. Gas proceeds are expected to add 0.8% to the country's growth rate in 2013, and 1% in 2014. In addition to economic growth, the official said, more gas production will increase taxes that the government collects, thereby further brightening the economic picture. About a billion shekels can be expected from gas tax proceeds in 2013, but that number should be significantly higher the following year, the source said.

A more complete forecast will be released only after the elections, when debate resumes on the 2013-2014 budget.