UPDATE 1-Israel Q3 GDP grows by annualized 2.3 pct led by govt spending, exports

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JERUSALEM, Nov 18 (Reuters) - Israel's economy so far in 2018 is expanding more slowly than previously thought, after third-quarter data showed weaker-than-expected growth mainly led by government spending and exports.

In a preliminary estimate, gross domestic product grew by an annualized 2.3 percent in the July-September period, the Central Bureau of Statistics said on Sunday, below analysts' expectations in a Reuters poll of 2.8 percent.

The bureau also lowered estimates for the prior two quarters, pushing down growth in the first half of 2018 to an annualized 3.7 percent, versus 4.2 percent a month ago.

The bureau last week said Israeli inflation held at 1.2 percent in October - likely keeping the Bank of Israel's benchmark interest rate at 0.1 percent once again when the decision is made on Nov. 26.

The central bank's economists forecast economic growth of 3.7 percent this year and rate increases starting in the first quarter of 2019.

In the third quarter, exports - which comprise over 30 percent of economic activity - rose 7.2 percent, private consumption gained 2.1 percent and investment in fixed assets slipped 6.3 percent. Government spending jumped 9.5 percent while imports dipped 5.0 percent. (Reporting by Steven Scheer; Editing by Tova Cohen and Dale Hudson)