This item was posted on Globes site just now, echoing much of what I have been arguing for the past 9 months.

Main point – Israel will come out of the recession relatively early. UBS expects growth at well over 2% in 2010.

The article in full appears below.

UBS believes that economic activity in Israel “will show clearer signs of a pickup over the course of the third quarter of 2009.” The assessment is based on the Swiss bank’s composite lead economic indicator, which showed a moderate rise in April-May, and a strong rise in June.

UBS economic Reihard Cluse believes that the Israeli economy will recover sooner than many other organizations that track the local economy, including the Bank of Israel, which is quite concerned about growth forecasts.

Cluse writes, “Overall, the new data point has strengthened our confidence that the Israeli economy will return to positive growth (in sequential quarterly terms) in the third quarter, following a weak first quarter and, most likely, an even weaker second quarter. We maintain our above-consensus growth forecasts of minus 0.8% for 2009 and 2.7% for 2010 (consensus estimates: minus 1.2% in 2009 and 1.6% in 2010; and the Bank of Israel forecast of minus 1.5% in 2009 and 1% in 2010).

Cluse adds, “Compared with many of its EMEA peers, the Israeli economy suffers from relatively few structural problems; we believe this should help it to pick up again relatively quickly once the global economy (and the US economy, in particular) recovers in a more sustained manner.”

UBS’s composite lead economic indicator comprises six variables: manufacturing Purchasing Managers Index (PMI ) for stock of purchases, new order and new export orders; intermediate goods imports; the Tel Aviv 100 Index, and the Bank of Israel quarterly lead indicator. UBS states, “All of these subcomponents registered positive changes in June.” The banks stressed the word “all”.