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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

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.

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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.