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UPDATE 1-Israeli economy tore ahead in second quarter, but not as much as thought

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JERUSALEM, Oct 17 (Reuters) - Israel's economy grew at an annualised 2.4 percent in the second quarter, triple the rate in the prior three months but still below expectations of even stronger growth in 2017.

The economy accelerated from an annualised 0.8 percent expansion -- revised up from a 0.6 percent pace -- in the first quarter as a rebound in private consumption overshadowed falling exports.

Still, the pace of growth in April-June was less than an initial estimate in August of 2.7 percent. A month ago, the Central Bureau of Statistics revised the growth rate to 2.4 percent and left it unchanged in a third estimate on Tuesday.

Israel's economy is forecast to grow about 3.5 percent in 2017, slowing from a 4 percent expansion in 2016, and will need a strong second half to meet that prediction.

The Bank of Israel, which raised its 2017 growth estimate to 3.4 percent in July, is expected to adjust its forecast again on Thursday when it decides on interest rates.

For the first half of the year, GDP grew an annualised 2.1 percent, the bureau said.

Exports - which comprise more than 30 percent of Israeli economic activity - fell by 6.5 percent, while private consumption grew 5.9 percent while investment in fixed assets rose by 11 percent.

Israeli policymakers previously downplayed the weaker-than-expected second-quarter growth, remaining upbeat on the economy due to a strong labour market. Minutes of the central bank's Aug. 29 rates discussion showed that monetary policy committee members had expected a downward revision to GDP data.

The second quarter is the first period since the third quarter of last year to give a clear picture of Israel's economy after one-time effects distorted data from the past two periods. (Reporting by Steven Scheer Editing by Jeremy Gaunt)