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September 2011
The Israeli Economy
• GDP ($Billion) 218• Population (7/2011, Million) 7.8 • GDP per capita ($) 28,575• Foreign Trade (% of GDP) 74% • Total Exports (% of GDP) 37%• Unemployment (Q2/2011) 5.5%
The Israeli Industry
• Share of business sector 21% • Industrial Sales ($Billion) 95• Industrial Exports (% of sales) 43% • Employees 350K• Main branches: Chemicals, Electronics & Food2
The Israeli Economy – 2010 Facts & Figures
The Manufacturers' Association of Israel
Israeli Economy
Strengths
The Manufacturers' Association of Israel
3
Rapid Growth in Israeli Economy
4
The Manufacturers' Association of Israel * M.A.I Economic Research Department early estimates.
GDP GDP per Capita Business Sector GDP
4.0%
2.2%
4.5%
0.8%
-0.9%
0.3%
4.8%
2.9%
5.8%
4.5%
2.6%
5%
2011 Est.*
The Israeli EconomyReal Annual Changes
Export Oriented Growth
5
The Manufacturers' Association of Israel
7%
41%34% 27% 31%
54%62%
80%
102%
120%
102%
134% 145%
0%
1%
12%
6%
4% 4%11%
15%
26%32%
42%
33%
44% 46%
Jan.-June '11
Industrial Exports
Industrial Production
Export = 43% of Sales
Export Oriented Growth in IndustryReal Cumulative Rate of Change, Since 1998
Export = 31% of Sales
To Industrial Output To Employment in Industry
To Industrial Export
71%65%
75%
The High Tech Sector Contribution to Industrial Growth in 2004-20
As Percentage of Total Growth
The High Tech Sector Contribution to Industrial Growth
The Manufacturers' Association of Israel 6
2004 – Q2/2011
Including 8/2011))
A Continuous Decrease in Unemployment Rate
7
10.3% 10.7% 10.4%
9.0%8.4%
7.3%
6.1%
7.5%6.6%
5.6%
2011 Frcst.
Unemployment RateAs Percent of Civilian Labor Force
The Manufacturers' Association of Israel * M.A.I Economic Research Department early estimates.
Reducing Direct TaxesTax Reform Path
8
The Manufacturers' Association of Israel
45%
25%
45%
24%
45%
24%
44%
23%
43%
22%
42%
21%
41%
20%
39%
18%
Marginal Income Tax Corporate Tax
World Leadership in Civilian R&D Investments
Source: Israeli CBS The Manufacturers' Association of Israel
9
4.5%4.0%
3.5%
3.0% 3.0%
2.1%2.0%2.0%
1.5%
1.0%
Israel is The World Leader in Civilian R&D InvestmentAs Percentage of GDP, 20 9
2010
4.
4%
Global R&D and Innovation Center
10
The Manufacturers' Association of Israel
High Share of ICT in the Business Sector
ICT= Information & Communications Technologies, 2006
Source: Israeli CBS The Manufacturers' Association of
Israel
11
15.9 14.8
13.7
12.1
10.9 10.8 10.7
9.2 8.7 8.4 8.3 7.9 7.9 7.9 7.6 7.6 7.5 7.5 7.1 7.1 6.9 6.8 6.7
5.0
ICT Sector GDP, Out of The Business Sector GDP 2006
2010
15.7
%
Other Asia US EU
23%
15%
28%
34%
23%
18%
26%
32%
Jan. - Jul. 2011
Distribution of export according to areas
Diversion of Trade to Asian Countries
The Manufacturers' Association of Israel 12
6%
5.5%
3%
2%
5.2%
3.7%
Target Deficit Actual Deficit
As percent of GDP
Responsible Fiscal PolicyRestrained Government Budgetary Deficit
The Manufacturers' Association of Israel
13
Source: Ministry of Finance
Relatively Low Government Deficit in Israel
Source: Eurostat, IMF, MOF
The Manufacturers' Association of Israel 14
32.4%
10.6% 10.5% 10.4% 9.5% 9.2% 9.1%7.0%
5.4%4.6% 4.1% 3.7% 3.3% 2.7% 2.5%
0.0%
Israel’s Government Deficit is Relatively LowAs Percent of GDP, 2010
Relatively Low Public Debt Ratio
The Manufacturers' Association of Israel
Source: Ministry of Finance, Eurostat, IMF
15
220.3%
142.8%
119.0%
96.8% 96.2% 93.0% 91.6%83.2% 81.7% 80.0% 76.6% 72.3%
62.7% 60.1% 55.0% 48.4% 43.6% 39.8%
As percent of GDP, 2010
Israeli Economy
Weaknesses
The Manufacturers' Association of Israel
16
The Manufacturers' Association of Israel
17
Gini Index in the OECD
Source: OECD
0.232
0.312
0.379
0.474
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Gini index in the OECD
Isra
el
Standard of LivingRelatively Low GDP Per Capita
18
The Manufacturers' Association of Israel
44
84
100
138
164
Gross domestic product per capita Index (OECD=100), Based on PPP, 2010
Cost of LivingNumber of Salaries Required to Buy…
19
The Manufacturers' Association of Israel
Source: BDO, Ziv Hatf, According to an average salary.
114
9079 71
60 56 54
30
To Buy an Apartment To Buy a Car*
* Mazda 3
14.2
11.6
9
5.9 5.4 5.4 5.34.1 3.8
46.3%
60.2%
64.6%
78.9%
Employment RateAs percentage of working age popualtion, 2010
Relatively Low Employment Rate
20
The Manufacturers' Association of Israel Source: OECD
Israeli Economy 2012 Forecast
21
The Manufacturers' Association of Israel
* M.A.I Economic Research Department early estimates.** Bank of Israel Forecast. Aug. 2011.
2011 Est.* 2012 Frcst.**
4.0%
0.8%
4.8%4.5%
3.9%
The Israeli EconomyReal Annual Changes
Real Annual Changes in GDP
http://www.industry.org.il/Eng/
The Manufacturers' Association of Israel
22