The Ministry of Industry and Trade today released a gloomy forecast for 2002. The ministry's economists expect zero economic growth, compared with other estimates for 2% growth in gross domestic product.
The estimates are based on the assumption that the security situation will remain unchanged and that Israel's three main export markets will continue to suffer from economic recession. These markets are a main source for foreign investments.
The economists estimate that inflation will come to 3% in 2002, compared with 1.4% in 2001, and that key lending rates will rise from 3.8% today to 5%.
The deficit is expected to deepen to 4.5% of gross domestic product, and come to NIS 21 billion, NIS 7 billion more than estimated in the budget.
In addition, the economists expect a drop in the volumes of value added tax, customs, and property tax.