JERUSALEM: Israel's economy grew at an annualised rate of 1.5 percent in the second quarter, slower than previously thought and its weakest level since early 2009, the Central Bureau of Statistics said on Tuesday.
It said the result was due to a bigger drop in exports than earlier calculated.
The bureau last month had initially estimated gross domestic product growth in the June-April period at 1.7 percent, which was well below analysts' expectations of 2.5 percent.
The downward revision puts pressure on the Bank of Israel to lower short-term interest rates further, especially since the bureau on Sunday reported that Israel's annual inflation rate eased to zero in August from 0.3 percent in July.
After the preliminary GDP figure, the central bank on Aug. 25 lowered its benchmark interest rate by a quarter-point in a surprise move to an all-time low of 0.25 percent, its second straight monthly cut.
It cited a weakening economy in the second quarter, which will be even weaker in the third quarter due to Israel's 50-day war with Palestinian militant group Hamas in July and August, as well as concerns over disinflation.
The Bank of Israel next decides on rates on Sept. 22, when it will also publish updated economic growth forecasts for 2014 and 2015.
It has said that a current growth estimate of 2.9 percent will be reduced since the Gaza conflict -- which kept consumers home in droves and led to a wave of tourist cancellations - - would likely shave off a half-point from growth this year.
Israel's finance ministry on Monday lowered its 2014 growth estimate to 2.4 percent due to the conflict and on slowing global trade, and cut is 2015 growth forecast to 2.8 percent from 3.0 percent.
The shekel weakened to a fresh one-year low of 3.64 per dollar, while Tel Aviv shares were mostly flat and government bond prices jumped as much as 0.7 percent.
In the second quarter of 2014, exports - which comprise some 40 percent of Israel's economic activity - slid 19.8 percent, below a prior estimate of a 17.7 percent drop. Private consumption grew 4.3 percent, more than double the first quarter, while investment in fixed assets fell 4.6 percent as investment in both industry and residential building fell for the second straight quarter.
Government spending grew 3.2 percent while imports slipped 7.3 percent.
Growth in the second quarter was its lowest rate since the first quarter of 2009, the height of the global economic crisis.
The bureau revised first quarter GDP growth to 2.7 percent from 2.8 percent.
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