Globes reports that UBS has predicted positive growth for the Israeli economy this year along with Morgan Stanley and Barclays Capital. Following an updated review, UBS economist Reinhard Cluse has raised his growth estimate from -0.8% to 0.3% for 2009, and from 2.7% to 3% for 2010.



Globes quotes Cluse: "Thanks to sound macroeconomic and structural fundamentals, the Israeli economy has shown good resilience throughout the global crisis." He described the Israeli recession as short and mild and added that the economy grew at a rate of 1% in the second quarter, thus technically emerging from the recession.



Cluse's growth estimate for 2010 is the most optimistic to be published to date, but he notes that "this is above consensus, but still below Israel’s medium-term growth potential, which we estimate at around 4%."



UBS estimates that economic growth and the current account surplus will continue to support an appreciation of the shekel against the US dollar. Cluse predicts shekel-dollar exchange rates of 3.80/$ at the end of 2009, and 3.50/$ at the end of 2010.