ISRAEL - Healthy Economy Despite Political Instability

Arno Froese

The World Bank lowered its global growth forecast for 2022 from 4.1% to 2.9%, following growth of 5.7% in 2021. The more distant future does not bode well, either, with a growth forecast of 3% for both 2023 and 2024.

In addition, the World Bank lowered the US growth forecast to 2.5%, compared with the previous forecast, which predicted the growth of the world’s largest economy to 4.2% in 2022.

Even China, the second-largest economy in the world, which is narrowing gaps with the US, is not escaping the global crisis. Its growth expectation is 4.3%, compared with 8.1% in 2021.

Israel, according to the OECD publication, is expected to grow in 2022 by 4.8%, compared with 4.9% in the previous forecast—a minor decline that most Western countries would be more than willing to accept.

Europe, which is very sensitive to rising energy prices, is experiencing an increase in inflation, and Germany has set a 50-year high with the price index jumping to 7.9%., 28 June 2022

Arno's Commentary

The tables have turned in favor of Israel when it comes to inflation. Comparing Israel with the USA, in 1984 Israel’s inflation rate stood at 373.2%, while the USA’s was 4.3%. In the year 2000, Israel’s inflation rate was listed as 1.05% against the USA’s 3.38%. For 2021, it was 1.45% Israel vs. 4.7% USA. These figures are for energy and food.

The UN Department for Economic and Social Affairs and Economic Analysis has this to say: “Global growth prospects have weakened significantly amid the war in Ukraine, rising energy, food and commodity prices, soaring inflation and tightening monetary policy stances by major central banks. The world economy is projected to grow by 3.1 percent in 2022, marking a downward revision of 0.9 percentage points from our previous forecast released in January 2022.”

Inflation and economic growth are related; one affects the other. Interestingly, however, Israel is avoiding the steep economic decline of other parts of the world “despite political instability.” Israel’s strong currency, combined with high intellectual capacity per capita, has caused global catastrophes like the pandemic, or lately Russia’s invasion of Ukraine, to affect Israel to a lesser degree.

When it comes to the future, Israel is distinctly different because of God’s promise: “In that day will I raise up the tabernacle of David that is fallen, and close up the breaches thereof; and I will raise up his ruins, and I will build it as in the days of old” (Amos 9:11).

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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