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Bank Hapoalim expects Israel to post 1.2% economic growth in 2001

IMF predicts only 0.7%

Bank Hapoalim expects Israel to achieve economic growth of 1.2% in 2001, climbing to 2.5% in 2002. A report from the IMF predicts a much slower economic growth rate of 0.7% for this year.

Hapoalim points out that industrial exports fel 4.7% in July and August compared with Q2 2001. This continues the 7.8% decline in the second quarter.

Exports of all goods except diamonds came to $13.6 billion in the months of January through August. A third of the export was to the EU and another third went to the U.S.

Exports to the U.S. dropped 10% compared with the second half of last year.

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The decrease in imports has moderated in Q2 compared with Q1 to 1.8%.

Perishable goods imports rose 10%. On the other hand, imports of raw materials declined by 4.1% following a 5.3% drop in Q1 and a 6.2% drop in Q2.

The bank expects 0.4% inflation in September and 0.6% in October. In 2001 inflation is expected to reach 3%. For 2002, analysts expect inflation of 2.5%.

Analysts say direct foreign investments, and investments through securities, dropped 50% in the first eight months of the year against last year.