Israel achieved an impressive economic recovery in the first quarter of this year, showing a growth rate of 1.7% - in annual terms. That's according to data released today by the Central Bureau of Statistics.

The growth rate is in line and even exceeds the low end of earlier forecasts which projected a growth rate of -0.5%. The latest figure translates into a negative per capita growth rate of -0.8%.

In the fourth quarter of 2000, there was relatively large decline of 9.8% in growth, as a result of unrest in the Middle East region.

But the current growth rate is low compared with levels of almost 6% in 2000.

The increase in gross domestic product (GDP) in the first quarter this year largely reflects an obvious rise in the private-consumption sector. In aggregate terms, this sector rose by 10%, following a 7.6% jump in the fourth quarter of 2000.

Growth was also registered in the field of construction investments, after a significant drop in the fourth quarter of 2000.

In contrast, investment in machinery, equipment and vehicles declined by between 15% to 20%, in annual terms. A drop was also recorded in the goods and services sectors, excluding startup activity and sales by startups.

Business activity jumped 2.5% in the first quarter, after having declined in the fourth quarter. The rise was mostly generated by an increase in the commercial and services braches, due to growth of household expenses. Another contributing factor to GDP growth was investment in residential construction, particularly the 7.4% jump in investment in public housing, after sharply contracting in the previous quarter.

Construction posted mild growth after a sharp drop in the fourth quarter.

Industry rose by a moderate 0.7% in annual terms. But based on estimates, startup production fell significantly.

The import of goods and services excluding defense, slid by 8.1% in annual terms, after a marked rise of 17.9% in annual terms in the fourth quarter. Due to the drop in the import of goods and services, the general economic resources available from GDP and import decreased by 1.3% compared with the fourth quarter of 2000.

Private-consumption expenses increased by 10% in annual terms in the first quarter, which comes to a rise of 6.9% per capita. In the fourth quarter of 2000, private consumption rose by 4.6%. This increase reflects a rise in most expense items.

Expenses on durables rose by 18% per capita in annual terms, after rising 1.7% in the fourth quarter. The rise was primarily due to household goods, such as refrigerators, laundry machines, and air conditions, which rose by 34.9% per capita. On the other hand, a drop was recorded in the acquisition of vehicles and furniture.

Private-consumption expenses per capita, excluding durables, increased by 3.6% in annual terms, after rising by 4.8% in the fourth quarter. Household expenses rose in the categories of footwear, apparel and miscellaneous services.