Israel is continuing with its strong emergence from the recession.

For the second quarter running, GDP grew (2.2% annualised). Private consumption – often a euphemism for the standard of living – shot up by nearly 7%.

Encouragingly, the key components driving the improvement are exports (5%) and investments in fixed assets. If much has been written about Israel and its propensity to innovation, here is further proof of that concept.

I still offer words of caution. Unemployment has yet to see a serious change, keeping back many sectors of society. And the Bank of Israel continues to face a difficult juggling act between inflation, exchange rates and the rate of interest.