economic highlights 2011-2 israel

STATE OF ISRAELMINISTRY OF FINANCEInternational Affairs Department

ECONOMIC HIGHLIGHTSJuly 2011, 2nd Quarter 2011

Click to start

*

ContentsEconomic Figures

Balances

International Comparisons

Israel and the OECD

International Agreements

Relevant Sites

Contact Us

*

Economic FiguresGDP and Business GDPMajor GDP ComponentsGrowth: Israel compared to the WorldExports of Goods and ServicesForeign InvestmentsUnemployment & Participation RatesInflation RateGrowth of Main GDP Components 2008Main Economic IndicatorsMain Trading PartnersInflation Rate WorldwideBACK TO CONTENTS

*

*Current Prices, using a public exchange rate of 1$ = 3.46 NIS ** EstimatedMain Economic Indicators

Source: Ministry of Finance, IMFCONTINUE

Criteria200920102010Q22010Q32010Q42011Q1GDP(current prices in $B)*203.6213.152.953.554.555.1Real GDP Growth Rate(%)0.8%4.7%5.5%4.8%7.6%4.7% GDP per Capita (PPP adjusted)*28,581$29,531$--------GDP per Capita Growth Rate (%, 2005 prices)-1.1%2.8%3.7%2.8%5.4%2.7%Exports (Goods & Services) $B*(As Percentage of GDP)80.4(39.5%)91.3(42.9%)23.0(43.5%)23.1(43.1%)23.7(43.5%)24.6(44.6%)Imports (Goods & Services) $B*(As Percentage of GDP)76.0(37.3%)85.6(40.1%)21.3(40.2%)21.3(39.7%)21.1(40.5%)22.9(41.5%)Unemployment Rate(%)7.6%6.6%6.5%6.5%6.5%6.0%

*

Source: Ministry of Finance

CONTINUEMain Economic Indicators

Criteria2007200820092010Total Gross Debt(% of GDP)77.8%77.1%79.3%76.4%Government Expenditure (Percentage of GDP)43.6%43.0%43.0%42.7%Current Account Surplus(% of GDP)2.9%0.8%3.6%2.9%Inflation Rate(CPI, yearly average)0.5%4.6%3.3%2.7%

*


Main Economic IndicatorsCONTINUEAll 3 rating firms have reaffirmed Israels rating, without any downgrade,Since the global economic crisis in 2009.

Rating FirmTermDomestic BondsForecastOverseas BondsRatingRatingMoody'sLongA1StableA1Short-P1Standard & Poor'sLongAA-StableAShortA-1+A-1FitchLongA+StableAShort-F1

*

GDP and Business GDP

Annual rate of change, constant pricesIn 2010, Israel has recovered from the globalIn the 4th quarter of 2010, Israel economic crisis, and is back to previous years experienced exceptional growth rates growth rates Source: Ministry of Finance.

CONTINUE

*

GDP GrowthIsrael compared to advanced economies* (annual rate of change, constant prices)Source: Ministry of Finance, IMFSince 2004, Israels growth rate has exceeded the average growth rate of advanced economies.

CONTINUEIn 2009, as most of the world experienced a decline in GDP, Israel experienced a 0.8% growth in its GDP

*

Major GDP Components

Annual rate of change, in constant pricesSource: Ministry of Finance

CONTINUEIn 2010, Investment in Fixed Assets and Export of Goods and Services recovered sharply, after they were contracted severely in2009 due to the economic crisis.

*

Source: Ministry of FinanceExports of Goods and ServicesUS $ Billions, current prices

CONTINUE

*

Israels Main Trading Partners

2010, US $ BillionsSource: Central Bureau of StatisticsExports

CONTINUE* Since July 1997 the data on trade with Hong-Kong is added to the data on China Imports

1

18.5

6

3.1

2.9

2.3

1.8

1.7

1.3

1.3

1.3

Sheet1

USAChina*Belgium & LuxembourgIndiaUKNetherlandsGermanyTurkeyFranceItaly

201018.56.03.12.92.31.81.71.31.31.3

1

6.7

6.1

3.7

3.2

2.4

2.2

2.1

1.8

1.8

1.8

Sheet1

USAChina*GermanySwitzerlandItalyUKNetherlandsIndiaTurkeyJapan

20106.76.13.73.22.42.22.11.81.81.8

*

Israels Main Trading Partners

US $ BillionsSource: Central Bureau of Statistics

CONTINUEImportsExports

1

26.811.98.3

29.713.78.7

22.9106.3

26.413.37.3

Europe

Asia

North America

Sheet1

2007200820092010

Europe26.829.722.926.4

Asia11.913.710.013.3

North America8.38.76.37.3

1

19.29.819.9

21.912.221.2

15.49.517.6

18.913.819.6

Europe

Asia

North America

Sheet1

2007200820092010

Europe19.221.915.418.9

Asia9.812.29.513.8

North America19.921.217.619.6

*

Net Foreign Investments in Israel US $ Billion* 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries LtdSource: Ministry of Finance

CONTINUE

*

Unemployment and Participation As % of total labor forceSource: Ministry of Finance

CONTINUESince the 2nd quarter of 2009 unemployment is decreasing,hand in hand with an increase in participation rate since the 1st quarter of 2010.

1

0.0790.568

0.0760.568

0.0720.568

0.0690.567

0.0650.571

0.0660.577

0.0650.577

0.060.574

Unemployment Rate

Participation in the Labor Force

6.7%

56.6%

Sheet1

Q2Q3Q42008 Q1Q2Q3Q2Q3Q42010 Q1Q2Q3Q42011 Q1

Unemployment Rate7.6%7.3%6.7%6.1%5.9%6.0%7.9%7.6%7.2%6.9%6.5%6.6%6.5%6.0%

Participation in the Labor Force56.5%56.5%56.1%56.5%56.4%56.4%56.8%56.8%56.8%56.7%57.1%57.7%57.7%57.4%

*

Inflation Rate

Rate of change in CPI, yearly average, 2008=100Source: Central Bureau of Statistics, Ministry of Finance

CONTINUE

*

Inflation Rate

Rate of change in CPI, 12 months average, 2008=100Source: Central Bureau of Statistics, Ministry of Finance

CONTINUE

*

Inflation Rate Worldwide

Annual rate of change in CPI

Sources: Ministry of Finance, IMF

CONTINUEThe Israeli economy demonstrated a high level of stability compared to other countries throughout the global economic crisis

*

Source: Ministry of FinanceGrowth of Main GDP Components for Previous Quarter

NEXT CHAPTER: BALANCESBACK TO CONTENTS

CriteriaQ1 2011Real GDP+ 4.7%Business GDP+ 5.8%Exports+ 16.0%Private Consumption+ 6.8%Public Consumption+ -5.7%Investment in Fixed Assets+ 23.7 %

*

BalancesBudget Deficit Target and ExecutionGross Public DebtBACK TO CONTENTSBudget Deficit and General Government ExpenditureGross Tax BurdenCurrent Account and Net Foreign Debt

*

Gross Public Debt

As % of GDPSource: Ministry of Finance Since 2003, gross public debt has been on a consistent downward trend, only interrupted by the extraordinary circumstances surrounding the 2009 global economic crisisCONTINUE

*

Budget Deficit Target and Executionin NIS million, current pricesSource: Ministry of Finance CONTINUE

For the first time in its history, Israel enacted a biennial budget for the years 2009-2010

In both years, Israel came in under budget target.

*

Source: Ministry of FinanceBudget Deficit and General Government ExpenditureGeneral Government Expenditure(% of GDP)CONTINUE

Budget Deficit(% of GDP)

2

0.453

0.447

0.436

0.43

0.43

0.427

1

Budget Deficit

200520062007200820092010

Government Expenditure45.30%44.70%43.60%43.00%43.00%42.70%

2

3

1

0.018

0.009

0

0.022

0.052

0.037

1

20052006200720082009201020070.80%20070.02%

Budget Deficit1.80%0.90%0.00%2.20%5.20%3.70%20061.20%20061.00%

20051.60%20051.90%

20043.00%20043.60%

20034.80%20035.40%

20025.40%20023.60%

20014.60%20014.20%

20002.40%20000.70%

19993.70%19993.20%

1

2

3

*

Current Account Balance and Net Foreign DebtSource: Ministry of Finance.Since 2003, the current account balance is positive, and is accompanied by a decrease of net foreign debtCurrent Account Surplus (% of GDP)Net Foreign Surplus*(% of GDP)CONTINUE

*Current Prices, using a public exchange rate of 1$ = 3.46 NIS

*

Source: Ministry of Finance, OECDGross Tax Burden as % of GDPOECD countries average: 34.8% (2008 average)NEXT CHAPTER: INTERNATIONAL COMPARISONSBACK TO CONTENTS

1

0.354

0.355

0.359

0.363

0.338

0.314

0.325

1

2004200520062007200820092010

35.40%35.50%35.90%36.30%33.80%31.40%32.50%

2

3

MBD000CDBDA.

*

International ComparisonsNASDAQ and Tel-Aviv 100 (monthly average)WEF Global Competitive IndexCentral Bank Interest Rates: Israel and U.S.ABACK TO CONTENTSIMD World Competitiveness Yearbook

*

Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2011IMD World Competitiveness Yearbook 2011The Institute for Management

Development ranked Israel

17th

out of 59 countries for 2011

(Israel was also ranked 17th in 2010)

CONTINUE

*

Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2011

IMD World Competitiveness Yearbook 2011CONTINUE

*

Source: World Economic Forum, Global Competitiveness Index, 2010-2011The World Economic Forum

ranked Israel

24th

out of 139 countries

for 2010-2011

CONTINUEWEF Global Competitiveness Index 2010-2011

*

Source: World Economic Forum, Global Competitiveness Index, 2010-2011


*

Central Bank Interest Rates: Israel and U.S.ASource: Bank of Israel (BOI), Federal ReserveBank of Israel Rate (BOI)U.S. Federal Funds Rate (FED) = 0%

CONTINUEThe Bank of Israel was the first in the western world to raise interest since the outburst of the economic crisis.

The rate was raised gradually from 0.5% to 3.25%

1

0.010

0.00750

0.0050

0.0050

0.0050

0.0050

0.0050

0.00750

0.00750

0.00750

0.010

0.01250

0.01250

0.01250

0.0150

0.0150

0.0150

0.0150

0.01750

0.01750

0.020

0.020

0.020

0.020

0.02250

0.0250

0.030

0.030

0.03250

Bank of Israel Interest Rate

Federal Reserve Rate

Sheet1

2006 1234567891011122007 1234567891011122008 1234234567891011122010 1234567891011122011 123456

Bank of Israel Interest Rate4.50%4.75%4.75%5.00%5.25%5.25%5.25%5.50%5.50%5.50%5.25%5.00%4.50%4.25%4.00%4.00%3.75%3.50%3.50%3.75%4.00%4.00%4.00%4.00%4.25%4.25%3.75%3.25%1.00%0.75%0.50%0.50%0.50%0.50%0.50%0.75%0.75%0.75%1%1.25%1.25%1.25%1.50%1.50%1.50%1.50%1.75%1.75%2.00%2.00%2.00%2.00%2.25%2.50%3.00%3.00%3.25%

Federal Reserve Rate4.50%4.50%4.75%4.75%5.00%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%5.25%4.75%4.50%4.50%4.25%3.00%3.00%2.25%2.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%000000000000

*

NASDAQ & Tel Aviv 100 monthly averageSource: Ministry of FinanceTel Aviv 100 corresponds with the NASDAQ to current events

NEXT CHAPTER: ISRAEL AND THE OECDBACK TO CONTENTS

*

Israel and the OECDUnemploymentGDP per CapitaReal GDP GrowthExpenditure on R&DIsrael was invited as a full member in the OECD on May 10th, 2010, and officiallyjoined in September 10th, 2010.BACK TO CONTENTS

*

Source: OECD

CONTINUEIsrael is ranked 1st of all OECD countries by expenditure on R&D (research & development)

as a percentage of GDP (4.27 %), demonstrating innovation, development and creativity.

Expenditure on R&DAs % of GDP, 2008, or latest available year

*

Real GDP Growth

3-year average at end of periodSource: OECD

CONTINUEIsraels 3-year average growth rate is higher then most OECD members.

For Israels year-on-year graph, seeslide no.7

*

GDP per capita Current prices and PPPs, 2009Source: OECD

CONTINUEFor Israels adjusted PPP GDP Per Capita, seeslide no.4Although no comparable data for 2010 exists, it is reasonable to assume a diminishinggap between Israel and the OECD average

*

Source: Ministry of Finance, OECD

Israels unemployment rate is in an ongoing downtrend, reaching an historic low level of 5.8% in April 2011. During the last global economic crisis, Israel experienced a relatively mild increase in unemployment rates.

For Israels unemployment, seeNEXT CHAPTER: INTERNATIONAL AGREEMENTSBACK TO CONTENTS

Unemployment Rate Average 2006-2008, or latest available periodslide no.14

*

International AgreementsAvoidance of Double Taxation AgreementsBilateral Investment TreatiesCooperation in Industrial R&D AgreementsInternational Organization MembershipsIsraels Free Trade AgreementsBACK TO CONTENTS

*

QIZ Agreements

Egypt(2004)

Jordan(1998)Israels Free Trade Agreements

1985199219971997199920002007USAEFTATurkeyCanadaMexicoEuropean Union (Association Agreement)MERCOSUR (Argentina not yet in force)CONTINUE


*

Avoidance of Double Taxation Agreements

CONTINUE


*

Cooperation in Industrial R&D Agreements

CONTINUE


*

Bilateral Investment Treaties

CONTINUE

Source: Ministry of Finance* See comments in the Bilateral Investments Treaties page in our website

*

Bilateral Investment TreatiesCONTINUE

Source: Ministry of FinanceSouth Africa*ThailandTurkeyTurkmenistanUkraine*UzbekistanSlovakiaSlovenia*SerbiaMongoliaPolandRomania*MontenegroPeru*Vietnam** See comments in the Bilateral Investments Treaties page in our website

*

Main International Economic Organizations Membership:Israel is a member in leading international economic organizations: United Nations Organizations United Nations Agencies World Bank Group International Monetary Fund OECD Regional Organizations Inter-Governmental Organizations

NEXT CHAPTER: RELEVANT SITESBACK TO CONTENTS


*

Relevant SitesBACK TO CONTENTSMinistry of FinanceBank of IsraelCentral Bureau of StatisticsIsraeli Government PortalIsrael Securities AuthorityMinistry of Industry, Trade and LaborCONTACT USMinistry of Foreign Affairs

*

WE WELCOME YOUR FEEDBACKMr. Roni HershkovitzDirectorOverseas Economic Information International Affairs DepartmentMinistry of FinanceJerusalemIsraelMr. Assaf LuxembourgOverseas Economic InformationInternational Affairs DepartmentMinistry of FinanceJerusalemIsraelSTART OVER

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

economic highlights 2011-2 israel

Investor Relations