Israel's central bank says the country's economy is contracting. A new report adjusts predictions downward as part of the global economic crisis.
The central bank issued its report on Sunday. It says Israel's economy will shrink by 0.2 percent this year. In contrast, an earlier prediction forecast 1.5 percent growth. Other predictions in the new report are an unemployment rate of 7.6 percent and a government deficit equal to about 4 percent of the gross domestic product. Part of that is the cost of Israel's just-completed offensive in Gaza.
Yosef Saadon, a spokesman for the Bank of Israel, said, "We are producing much less than we predicted and much less than in previous years." But he said it is not technically a recession.
