Recent Economic Developments, 118
Israel entered the period reviewed––the first half of 2007–– with very strong economic fundamentals. Despite the Second Lebanon War in the summer of 2006, GDP grew rapidly in 2006, led by exports and fixed capital formation. Responsible fiscal policy and expansionary monetary policy had helped maintain the fast pace of growth; the current account surplus reflected the higher rate of saving, the boom in the capital market and stability in the financial markets, that attracted foreign investment on an unprecedented scale.
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