(Adds Fischer comments)
JERUSALEM, Jan 7 (Reuters) - The Bank of Israel will soon raise its economic growth forecast for 2010, currently at 2.5 percent, Bank of Israel Governor Stanley Fischer said on Thursday.
"Our current forecast is for gross domestic product growth of 2.5 percent but soon we will revise it upwards," Fischer said in remarks prepared for delivery at a conference. He did not say what the new estimate would be.
He noted that after growth of an annualised 3 percent in the third quarter, fourth-quarter GDP growth is expected at 4 percent -- resulting in a "V" picture for Israel's economy.
Israel's economy grew an estimated 0.5 percent in 2009, compared with a contraction of 3.5 percent for OECD countries. In 2010, the OECD countries are estimated to grow 1.9 percent.
Bank Leumi, Israel's largest bank, on Thursday raised its GDP growth forecast for 2010 to 3.5 percent from a previous estimate of 2.7 percent.
Fischer also said that with tax revenues higher than expected, Israel's budget deficit looks to be just above 5 percent of GDP in 2009, below a target of 6 percent. For 2010, the deficit should be lower than a target of 5.5 percent of GDP, he said.
As a result of the government's fiscal policies the public debt burden is expected to have grown only slightly, Fischer said. The central bank estimates Israel's debt to GDP ratio at 78.7 percent in 2009 and 78.8 percent in 2010, above 2008's level of 77 percent.
The growth of 2 percent since the start of the global crisis is far below the OECD average of 14.7 percent.
On the issue of the Bank of Israel's policy of intervening in the foreign exchange market in an attempt to restrain the shekel's appreciation, Fischer said: "We cannot continue to do this forever".
With the shekel gaining to near 3.71 from 3.7750 at the end of 2009, the central bank has bought as much as $500 million of foreign currency the past few sessions.
Fischer partly blames the strong economy and a current account surplus in Israel's balance of payments for the shekel's strength.
Israel posted a current account surplus of 3.1 percent of GDP in 2009 and is forecast to record a surplus of 2.3 percent of GDP this year, Fischer said.
(Reporting by Steven Scheer; Editing by Andy Bruce)