The publication by the Central Bureau of Statistics (CBS) on February 16th of its first estimate of GDP in the fourth quarter and second half of 2010 caused consternation among private-sector economists, because of its revelation of exceptionally strong growth. For the second half of 2010, GDP expanded at an annualised rate of 5.4%, with business sector GDP rising even faster, by 6.1%. Growth was domestic-led. Public-sector consumption outpaced private consumption, with annualised increases of 6.5% and 4.5% respectively. Fixed capital formation surged by 15.8%. Purchases of new vehicles provided a strong impetus to both private consumption and investment-with the heavy tax on these items generating a large share of the government's above-forecast tax revenue. The external sector, however, was a drag on growth: exports, excluding diamonds and start-up companies, rose by only 3.7% annualised in the second half, whereas civilian imports (net of ships, planes and diamonds) rose by 8.6%.

The most surprising aspect of the CBS release was the strength of fourth-quarter growth. GDP expanded by an annualised 7.8%, up from 4.4% in the third quarter and 5.2% in the second. However, the CBS reiterated its usual disclaimer, warning that the quarterly data tends to be volatile and that not too much weight should be placed on preliminary estimates.