The decline in the index
reflects a decrease of about 12 percent in the business GDP.
Based on a conservative
estimate, Israel's business GDP will fall by about 5.7 percent in 2020
The Melnick state of the Israeli Economy
Index fell by a cumulative rate of 11.7
percent in the months of April and May 2020. Statistical difficulties, due to a
break in the data series, and problems estimating the seasonal factors, do not
allow the monthly declines of the index to be separated for the months of April
and May. According to our estimate, the industrial production index and the
revenue in commerce and services, seasonally adjusted, fell in April by 17.6
percent and 17.3 percent correspondingly (see note below). Imports of inputs
for domestic production, which is a major component of the import index, fell in
May by 11.3 percent.
According to a conservative estimate,
assuming the stabilization of economic activity until the end of 2020, at the
level of May, the annual decline in Israel's business sector GDP in 2020 can be
estimated at 5.7 percent. The Melnick Index clearly indicates that the Israeli
economy is in a deep recession. An annual decline in business sector GDP of 5.7
percent, which represents a decrease of 7.4 percent in per capita terms, has
never been observed in Israel since the creation of the State.
Important Note on the Index Data for May:
Due to measurement difficulties, the CBS did not publish seasonally adjusted
data (for the months of March and April) for the Industrial Production Index
and for the revenue in the commerce and services of some sectors. The data we
use for the above indicators are calculated on the basis of the original
series, without seasonal adjustment, and seasonal factors of the last three
years; hence, these data may change when the CBS publishes official data.
Components of the May Index include: a
17.6% decline in the manufacturing output index in April, after a 3.0% decline
in March; a decrease of 17.3% in the revenue of the trade and services
industries in April, after a decrease of 9.6% in March; a drop of 8.9% in the
May index, following a 3.7% rise in April, and a 3.1% decline in the number of
employee posts in the business sector in March, after a 0.1% rise in February.
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