Bank Leumi sees Israeli GDP growth rising to 1.9% in 2002, from 0.5% in 2001

Analysts predict per capita production falling by 1% next year
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Israel's gross domestic product will grow 1.9% in 2002 compared with an estimated 0.5% in 2001, Bank Leumi economists forecast on Monday.

Per capita production is expected to fall by 1.0% and growth in per capita consumption to slow to one percent next year, compared with an estimated 1.4% rise in 2001.

Public consumption is expected to grow by 3.0% compared with an estimated 5.4% in 2001.

After a drop in exports this year, estimated to be as much as 11.4%, exports of goods and services are forecast to rise by 2.3% in 2002, boosted by a lower shekel and a recovery in global demand towards the end of 2002.

The tourism industry is expected to fare slightly worse than this year.

Leumi economists expect the current account deficit in the balance of payments to narrow to $2 billion from $3 billion in 2001, as a result of the higher export levels.

Unemployment is forecast to rise to an average of 9.6% next year compared with an average 9.1% in 2001.

Inflation levels will remain steady - in the last 12 months to October the consumer price index rose by two percent. The economists forecast inflation in 2002 will be at the lower end of the government's 2% to 3% target.

The economists also said the government's forecast for tax revenues for next year is overly optimistic and they predicted the budget deficit as a percentage of GDP would be above the 2.4% target.

In 2001 the budget deficit is expected to reach 2.75% of GDP, a fullpercentage point above the government's target.