The International Money Fund has sharply lowered its estimates for Israeli economy growth for this year and next, in real terms.

For 2001 the IMF estimates that Israel's gross domestic product will grow by 0.3%, compared with an estimate from just two months ago, of 0.7%.

For 2002 the IMF economists predict GDP growth of 1.7%, compared with an earlier forecast of 2.2%.

They expect the consumer price index to rise by 1.8% next year, and predict that unemployment will surge to 9.5%, from its current level of 9.3%.

The updated figures for Israel are in keeping with the IMF's gloomy predictions for the whole world. Two months ago the fund estimated that the global economy would grow by 3.5% in 2002, but now they put the figure at 2.4%.

Most forecasts for specific countries were lowered by about 1%.

The IMF's 2002 growth forecast for the United States was cut by a steep 1.5%, from 2.2% to 0.7%.