The International Monetary Fund said on Tuesday that it expects the Israeli economy to be the fastest growing Western economy in 2013.
The Israeli economy is predicted to grow by 3.8% in 2013 and 3.3% in 2014. The U.S. economy grew by 1.6% in 2013 and 2.6% in 2014 while the Eurozone is only expected to grow by 0.4% this year and 1% in 2014.
Meanwhile, the Palestinian economy is expected to shrink in 2013 after nearly a decade of rapid growth. Israel Hayom reports:
The World Bank blamed the 0.1% economic contraction on a decline in foreign budget support to the aid-reliant Palestinian government, saying it exposed the "distorted nature" of the economy.
Its report focused particularly on territory known as Area C -- some 61% of Judea and Samaria which is under full Israeli control. The World Bank said the Palestinians could boost their economy by a third if they were able to exploit this land.
The bank noted that Judea, Samaria and the Gaza Strip saw annual economic growth of some 9% in the years 2008-2011. That slowed to just 1.9% year on year in the first six months of 2013, with Judea and Samaria's gross domestic product contracting.
"The faltering nature of the peace process and the persistence of administrative restrictions as well as others on trade, movement and access have had a dampening effect on private investment and private sector activity," the bank said.