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Economic Highlights Presentation
4th Quarter 2011
STATE OF ISRAEL
MINISTRY OF FINANCE
International Affairs Department
In any case of information derived from sources external to the Ministry of Finance, such sources are mentioned at the bottom of each item
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
Table of Contents
Main Economic Indicators
GDP and Business GDP
Major GDP Components
Exports of Goods and Services
Foreign Investments
Unemployment and Participation
Consumer Price Index
Inflation Rate
Economic Figures
Main Trading Partners
Israel’s Credit Ratings
Gross Domestic Capital Formation
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Economic Figures
* Using a public exchange rate of 1USD=3.7NIS (2010 average) ** Estimated
Criteria 2009 2010 2010 Q4 2011 Q1 2011 Q2 2011 Q3
GDP (constant prices, 2005, in $B)*
189.9 199.0 50.9 51.5 51.9 52.4
Real GDP growth rate (% change)
0.8% 4.8% 7.2% 4.7% 3.5% 3.4%
GDP per capita, based on PPP (Current international $)
28,526$ 29,901$ -- -- -- --
GDP per capita growth rate (%, 2005 prices)
-0.9% 2.9% 8.6% 5.2% 2.6% 5.3%
Exports (goods & services), $B* (As % of GDP)
75.1 39.5%
85.3 42.9%
22.1 43.4%
22.5 43.7%
22.6 43.5%
21.5 41.0%
Imports (goods & services), $B* (As % of GDP)
71.0 37.4%
80.0 40.2%
20.7 40.7%
21.9 42.5%
22.4 43.2%
22.0 42.0%
Unemployment rate 7.6% 6.6% 6.5% 6.0% 5.5% 5.6%
Additional Sources: IMF
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Economic Figures
Criteria 2005 2006 2007 2008 2009 2010
Public debt (As % of GDP)
93.8% 84.3% 77.8% 77.1% 79.3% 76.3%
General government expenditure (As % of GDP)
45.3% 44.7% 43.6% 43.0% 43.0% 42.6%
Current account surplus (As % of GDP)
3.1% 5.1% 2.9% 0.9% 3.6% 2.9%
Inflation rate (CPI, yearly average, % change)
1.4% 2.1% 0.5% 4.6% 3.3% 2.7%
Budget deficit (As % of GDP)
1.8% 0.9% 0.0% 2.2% 5.2% 3.7%
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-0.3% -0.6%
1.5%
4.8% 4.9%
5.6% 5.5%
4.0%
0.8%
4.8%
7.2%
4.7%
3.5% 3.4%
-1.2% -1.0%
2.3%
6.1%
6.8% 6.8%
6.1%
4.5%
0.4%
5.8%
8.6%
5.2%
2.6%
5.3%
-3%
-1%
1%
3%
5%
7%
9%
11%
GDP Business GDP
GDP and Business GDP Annual rate of change, constant prices, 2005
In 2010, Israel has recovered from the global economic crisis, and is back to previous years’ growth rates. In the 3rd quarter of 2011, business GDP recovered sharply.
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Major GDP Components Annual rate of change, constant prices, 2005
4.2%
6.3%
2.8%
1.4% 1.4%
3.0% 3.3% 2.1% 2.2% 2.2%
13.1%
14.5%
4.4%
-5.8%
13.7%
5.5%
9.2%
6.6%
-12.5%
13.6%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Private Consumption
Public Consumption
Investment in Fixed Assets
Exports of Goods and Services
Global economic crisis
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Exports of Goods and Services US $ Billions, constant prices, 2005
30.19 36.66 39.77
43.32 50.29
57.71
46.33
56.09
13.39
16.03 17.45
19.27
21.13
24.09
21.98
24.23
0
10
20
30
40
50
60
70
80
90
Services Goods
* Using a public exchange rate of 1USD=3.7NIS (2010 average)
Global economic crisis
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Main Trading Partners US $ Billions, 2010
18.5
6.0
3.1 2.9 2.3
1.8 1.7 1.3 1.3 1.3
0
2
4
6
8
10
12
14
16
18
20Exports
* Since July 1997 the data on trade with Hong-Kong is added to the data on China
Additional Sources: Central Bureau of Statistics
6.7 6.1
3.7 3.2
2.4 2.2 2.1 1.8 1.8 1.8
0
1
2
3
4
5
6
7
8Imports
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Main Trading Partners US $ Billions, 2010
Additional Sources: Central Bureau of Statistics
19.2
21.9
15.4
18.9
9.6 12.0
9.3
12.9
19.9
21.2 17.6
19.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2007 2008 2009 2010
Exports
Europe
Asia
North America
26.8
29.7
22.9
26.5
11.7 13.2
9.8
13.0
8.3 8.7 6.3 7.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2007 2008 2009 2010
Imports
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Gross Domestic Capital Formation
19.2%
18.0%
17.6%
18.9%
19.3%
20.3%
19.6%
17.9% 18.1%
16%
17%
18%
19%
20%
21%
As % of GDP
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Foreign Investments US $ Billions
4.9 4.3
9.5
8.3
19.4
14.4
10.8 10.7
17.6
1.6
3.3 2.4
4.3
15.3
8.8
10.9
4.4 5.2
0
5
10
15
20
25
Total Investments Direct Investments
* 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries Ltd.
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Unemployment and Participation As % of total labor force
6.4%
7.5%
7.9%
7.6%
7.2%
6.9%
6.5% 6.6%
6.5%
6.0%
5.5% 5.6%
56.8% 57.0% 56.8% 56.8% 56.8% 56.7%
57.2%
57.7% 57.7%
57.5% 57.49% 57.4%
54%
55%
56%
57%
58%
59%
4%
5%
6%
7%
8%
9%
Q4 2009 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3
Unemployment Rate
Participation in the Labor Force
Since the 2nd quarter of 2009 unemployment is relatively decreasing, hand in hand with a relative increase in participation rate since the 1st quarter of 2010.
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Consumer Price Index Last 24 monthly averages, 2010=100
99.1 99.1
98.5 98.2 98.3
99.2 99.5
99.8
100.3
100.8 101.0
101.3 101.4 101.8
102.0 102.3
102.5
103.1
103.6 104.0 104.1 104.0
104.2
103.7 104.0
95
96
97
98
99
100
101
102
103
104
105
Additional Sources: Central Bureau of Statistics
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Inflation Rate Rate of change in consumer price index, yearly average
0.7%
-0.4%
1.4%
2.1%
0.5%
4.6%
3.3%
2.7%
-1%
0%
1%
2%
3%
4%
5%
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Israel’s Credit Ratings
Overseas Bonds Forecast
Domestic Bonds Term Rating Firm
Rating Rating
A1 Stable
A1 Long Moody's
P1 - Short
A+ Stable
AA- Long Standard & Poor's
A-1 A-1+ Short
A Stable
A+ Long Fitch
F1 - Short
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
International Comparisons
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Budget Deficit
Current Account Surplus
General Government Expenditure
Net Foreign Surplus
Gross Public Debt
Gross Tax Burden
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Gross Public Debt As % of GDP
99.1%
97.4%
93.8%
84.3%
77.8% 77.1%
79.3%
76.3%
70%
75%
80%
85%
90%
95%
100%
105%Since 2003, gross public debt has been on a consistent downward trend, only interrupted by the extraordinary circumstances surrounding the 2009 global economic crisis.
Global economic crisis
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-16,061
-3,626
-6,721
-3,657
-16,161
-6,371 -4,862
-39,286
-30,165
-44,355 -42,924
-50,000
-40,000
-30,000
-20,000
-10,000
0
Quarterly Budget Execution Yealy Budget Execution Yearly Budget Target
Budget Deficit Target and execution in NIS million, current prices
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. The proven effectiveness and functionality of the biennial budget have led the government to adopt the biennial budget for a second period through 2011-2012.
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General Government Expenditure As % of GDP
50.1%
47.3%
45.3%
44.7%
43.6%
43.0% 43.0% 42.6%
38%
39%
40%
41%
42%
43%
44%
45%
46%
47%
48%
49%
50%
51%
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Net Foreign Surplus As % of GDP
1.7%
4.5%
10.9%
14.7%
22.5% 22.6%
26.3% 26.6%
0%
5%
10%
15%
20%
25%
30%
* Using a public exchange rate of 1USD=3.7NIS (2010 average)
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Gross Tax Burden As % of GDP
35.5% 35.5% 35.6%
35.9%
36.2%
33.8%
31.4%
32.4%
30%
31%
32%
33%
34%
35%
36%
37%
Additional Sources: OECD
OECD countries average: 34.8% (2008 average)
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
International Comparisons
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Inflation Rates
Israel on WEF Rankings
Israel on IMD Rankings
Interest Rates: Israel & the U.S.
GDP Growth
Stock Indices: NASDAQ & Tel-Aviv 100
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GDP Growth Israel compared to advanced economies, annual rate of change, constant prices
4.8% 4.9%
5.6% 5.5%
4.0%
0.8%
4.8%
3.1% 2.7%
3.1% 2.8%
0.1%
-3.7%
3.1%
-4%
-2%
0%
2%
4%
6%
8%
Israel Advanced Economies
Additional Sources: IMF
Since 2004, Israel’s growth rate has exceeded the average growth rate of advanced economies.
In 2009, as most of the world experienced a decline in GDP, Israel experienced a 0.8% growth in it’s GDP.
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Inflation Rates Rate of change in consumer price index, yearly average
Additional Sources: IMF
3.3%
0.1%
1.6%
0.2%
-1.7%
-1.4%
2.2%
-0.9%
-0.5% -0.3%
2.7%
1.6% 1.7%
1.2%
-1.6%
-0.7%
2.4%
1.4%
0.7%
1.6%
-2%
-1%
0%
1%
2%
3%
4%
2009 (dark) 2010 (bright)
The Israeli economy demonstrated high stability compared to other countries throughout the global economic crisis.
The Institute for Management Development
ranked Israel 17th out of 59 countries for 2011
(Israel was also ranked 17th in 2010)
Israel on IMD Rankings IMD World Competitiveness Yearbook 2011
Additional Sources: IMD World Competitiveness Yearbook 2011 30
Information technology skills Central bank policy
Entrepreneurship Flexible and adaptability
Israel on IMD Rankings IMD World Competitiveness Yearbook 2011
Additional Sources: IMD World Competitiveness Yearbook 2011 31
Total expenditure on R&D (as % of GDP) Scientific research
Innovative capacity Venture capital
Israel on IMD Rankings IMD World Competitiveness Yearbook 2011
Additional Sources: IMD World Competitiveness Yearbook 2011 32
Israel on WEF Rankings World Economic Forum Global Competitiveness Index 2011-2012
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012
The World Economic Forum ranked Israel 22nd
out of 142 countries for 2011-2012
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Quality of scientific research institutions Venture capital availability
Strength of investor protection Utility patents per million population
Israel on WEF Rankings World Economic Forum Global Competitiveness Index 2011-2012
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012 34
Government procurement of advanced technology products Capacity for innovation
University-industry collaboration in R&D Firm-level technology absorption
Israel on WEF Rankings World Economic Forum Global Competitiveness Index 2011-2012
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012 35
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Interest Rates: Israel & the U.S.
1.25%
1.50%
1.75%
2.00%
2.50%
3.00%
3.25%
3.00%
2.75%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Bank of Israel Federal Reserve =0
The 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%.
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Stock Indices: NASDAQ & Tel-Aviv 100
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
Tel Aviv 100 NASDAQ
Tel Aviv 100 corresponds with the NASDAQ to current events, with relatively stable reactions.
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
Israel in the OECD
39
Real GDP Growth
Unemployment
GDP per Capita
Expenditure on R&D
Israel was invited as a full member in the OECD on May 10th, 2010, and officially joined in Sep. 10, 2010.
40
Expenditure on R&D As % of GDP, 2010 or latest available year
Additional Sources: OECD
4.25%
2.33%
0%
1%
2%
3%
4%
5%
6%Israel is 1st in the OECD in expenditure on R&D (research & development) as % of GDP, demonstrating innovation, development and creativity.
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Real GDP Growth 3-year average, end of period
Additional Sources: OECD
-0.10%
3.19%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%Israel’s 3-year average growth rate is higher then most OECD members.
42
GDP per Capita U.S $, Current prices, PPP, 2010
Additional Sources: OECD
28,510
34,025
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
43
Unemployment Rate 3-year average 2008-2010, or latest available period
Additional Sources: OECD
7.1% 7.7%
0%
5%
10%
15%
20%
25%Israel’s unemployment rate is in an ongoing downtrend, reaching an historic low level of 5.5% in Q2 2011.
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
International Agreements
45
Avoidance of Double Taxation
Bilateral Investment Treaties
Cooperation in Industrial R&D
Israel’s Free Trade Agreements
Economic Organizations
46
Israel’s Free Trade Agreements
QIZ Agreements 1985
1992
1997
1997
1999
2000
2007
USA
EFTA
Turkey
Canada
Mexico
European Union (Association Agreement)
MERCOSUR
2004
1998
Egypt
Jordan
More extended information is available in the Israel Ministry of Finance website
47
Avoidance of Double Taxation
More extended information is available in the Israel Ministry of Finance website
Austria
Belarus
Belgium
Brazil
Bulgaria
Canada
China
Czech Republic
Croatia
Denmark
Estonia
Ethiopia
Finland
France
Germany
Greece
Hungary
India
Ireland
Italy
Jamaica
Japan
Latvia
Lithuania
Luxembourg
Mexico
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Avoidance of Double Taxation
More extended information is available in the Israel Ministry of Finance website
Moldova
Norway
Philippines
Portugal
Poland
Romania
Russia
Singapore
Slovakia
Slovenia
South Africa
South Korea
Spain
Sweden
Switzerland
Thailand
Netherlands Turkey
Ukraine
United kingdom
Uzbekistan
U.S.A
Taiwan
Vietnam
Malta
Panama
49
Cooperation in Industrial R&D
More extended information is available in the Israel Ministry of Finance website
North America New York Massachusetts Maryland Virginia Wisconsin Colorado Illinois Oregon BIRD (Foundation) Ontario CIIRDF (Foundation)
South America Argentina Uruguay Brazil
Australia (Victoria)
Europe France Russia (Rusano, Skolkovo) Italy Germany Greece Czech Republic Bulgaria Lithuania Slovenia Denmark Hungary Turkey Portugal Finland Sweden Ireland * Through EUREKA (40 country Multilateral Initiative)
Asia China( Shanghai, Jiangsu, Most) India Taiwan SIIRD-Singapore (Foundation) KORIL-RDF-Korea (Foundation)
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Bilateral Investment Treaties
Albania
Argentina
Armenia
Azerbaijan
Belarus
Bulgaria
China
Croatia
India
Kazakhstan
Latvia
Lithuania
Germany
Cyprus
Czech Republic
El Salvador
Estonia
Georgia
Guatemala
Ethiopia
Hungary
Macedonia
Korea
Moldova
More extended information is available in the Israel Ministry of Finance website
51
Bilateral Investment Treaties
South Africa
Thailand
Turkey
Turkmenistan
Ukraine
Uzbekistan
Slovakia
Slovenia
Serbia
Mongolia
Poland
Romania
Montenegro
Peru
Vietnam
More extended information is available in the Israel Ministry of Finance website
52
Economic Organizations Membership in main international economic organizations
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
More extended information is available in the Israel Ministry of Finance website
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
Learn More
Contact
International Agreements
Learn More
54
Visit the Israel Ministry of Finance English
website for more information:
Economic Overview of Israel
Other publications and reports on the Israeli economy
Ministry of Finance publications and reports
About the Ministry
Ministry press releases
Learn More
55
Bank of Israel
Ministry of Foreign Affairs
Ministry of Industry, Trade and Labor
Israel Central Bureau of Statistics
Israel Government Portal
Click to open:
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Table of Contents
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Balances
International Comparisons
Main Economic Indicators
Israel in the OECD
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Contact
International Agreements
Contact
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Mr. Roni Hershkovitz
Mr. Assaf Luxembourg
Mr. Jonah Balakhaneh
Overseas Economic Information
International Affairs Department
Ministry of Finance
State of Israel
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