OECD raises Israel 2011 growth forecast to 5.4%

The OECD predicts in its latest Economic Outlook, released today, that Israel will achieve 5.4% GDP growth in 2011, up from 4.7% in 2010, but fall back to 4.7% in 2012, partly because of higher interest rates.

The OECD predicts that world GDP will be 4.2% in 2011 and 4.6% in 2012, and GDP growth by OECD countries will be 2.3% and 2.8%, respectively.

OECD Secretary-General Angel Gurría cautioned, "This is a delicate moment for the global economy, and the crisis is not over until our economies are creating enough jobs again. There is also some concern that if downside risks reinforce each other, their cumulative impact could weaken the recovery significantly, possibly triggering stagflation in some advanced economies."

Although the recovery is becoming self-sustained, with trade and investment gradually replacing fiscal and monetary stimulus as the principal drivers of economic growth, as well growing confidence, but risks include possible further rises in oil and commodity prices, a stronger-than-projected slowdown in China, the unsettled fiscal situation in the United States and Japan, renewed weakness in housing markets in many OECD countries, and financial vulnerabilities remain in the euro area.

Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2011