Moshe Kahlon
Moshe KahlonFlash 90

Following a negative report from the Central Bureau of Statistics (CBS) on the Israeli economy, Finance Minister Moshe Kahlon (Kulanu) summoned his top officials to an emergency meeting today (Monday).

The meeting focused on indications from the Central Bureau of Statistics (CBS) that the Israeli economy contracted strongly during the second quarter of 2015.

The CBS released preliminary indications yesterday that Israel's economy contracted strongly during the second quarter of 2015. According to the findings consumer spending, previously the strongest field in Israel's economy, grew by a mere 0.9 percent. This translated to a per capita drop of 0.9 percent.

Furthermore, the GDP only rose by 0.3 percent annually, while the business sector's GDP fell by 1.6 percent. Exports also fell by 12.5 percent in Q2.

"It’s hard to say that we didn’t know that the second-quarter data wouldn’t be good," an anonymous Finance Ministry official told Haaretz. "There were early warnings, but we didn’t expect that the data would be so bad. Nevertheless, we’re talking about a single quarter. The economy is in relatively good shape and we have to look forward with optimism."

Today's meeting opened with a declaration by the minister that he wants to implement a plan to promote growth within the next few weeks.

In order to do so, he instructed the department's top economist, Yoel Naveh, to examine what caused the reduction in consumer spending, accountant general Michal Abadi-Boiangiu to devise a program to strengthen exports, and Amir Levy to come up with proposals to encourage economic growth.

Inside sources say that those present at the meeting were concerned, but not unduly so.

Kahlon and other officials have pointed out that slagging GDP contrasts with other collected data that show a higher growth rate, including increased tax collection and reduced joblessness. Some have suggested that the CBS report is inaccurate, and that the best approach would be to wait for more accurate updates.

The Ministry says that it does not intend to adjust the treasury's economic-growth forecast. The GDP is still predicted to grow by 3.1 percent (1.4 percent per capita) this year, and by 3.3 percent (1.6 percent per capita) next year.