Israel's economy suffered major setbacks in 2001. Some analysts say its performance last year was the worst in nearly half a century.

Figures issued by Israel's Central Bureau of Statistics show that the country's Gross Domestic Product fell by 0.5 percent in 2001.

This is the worst figure recorded since 1953, when GDP dropped by 1.4 per cent.

The results have been announced at a time when the country's currency - the shekel - has fallen to an all-time low against the U.S. dollar and the government has been unable to get the approval of the parliament to pass a new budget.

Former Finance Minister Avraham Schohat, a member of the Labor Party, says that the latest statistics show that the country's "economic house is on fire."

Mr. Schohat has called on the Knesset, the Israeli parliament, to end its bickering and immediately approve a new national budget or risk plunging the country deeper into economic crisis. "The house is burning," said Mr. Schohat. "The economy is the worst since 1953. It's the worst and here in these corridors, in these [parliament] committees, everyone is discussing and does not want to see the responsibility of this house, the Knesset, and of the government to pass a budget for Israel."

The latest statistics indicate that Israel's economy continued to shrink in the fourth quarter of 2001, after officially entering a recession in the third.

The figures show that Israel has been hit hard by the U.S. recession, the collapse of the world technology market and a loss of investment and tourism following the start of the Palestinian uprising 15 months ago.

Some Israeli economists, however, believe that the outlook may not be so bleak.

Professor Dan Galai of the Hebrew University in Jerusalem says that the figures for 2001 should be combined with that of the previous year when growth surged by 6.4 percent.

He says when viewed this way, the local economy grew by a "healthy" average of 3 percent in the past two years.

As for this year? Some Israeli economists are predicting the country's growth will increase by one to two per cent.