ECONOMIC HIGHLIGHTS 2 nd Quarter 2009 STATE OF ISRAEL MINISTRY
OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT August 2009
International Affairs Department International Affairs Department
Slide 2 Contents Note: You can return to the beginning of each
chapter by clicking this symbols on the top of each slide. Economic
Figures Economic Figures Balances International Comparisons
International Comparisons Israel and the OECD Israel and the OECD
International Treaties International Treaties Relevant Sites
Relevant Sites Main Characteristics Main Characteristics Slide 3
Back to Contents Main Characteristics Highly Educated Population
Rapid Development of Technology & High-Tech Industries
Entrepreneurial Culture Open Economy Intense Trade Relations with
Numerous Partners Slide 4 Economic Figures GDP and Business GDP
Major GDP Components Growth: Israel compared to the World Exports
of Goods and Services Foreign Investments Unemployment &
Participation Rates Inflation Rate Growth of Main GDP Components
2008 Press for desired slide or continue: Back to Contents Main
Indicators Main Trading Partners Inflation Rate Worldwide Slide 5
*Using public exchange rate. ** In current prices Main Economic
Indicators 2009 Q1 2008200720062005Criteria
45.7199.3164.1144.0133.2GDP (current prices in $B)*
-3.7%4.0%5.4%5.2%5.1%GDP Real Growth Rate (%)
--$27,143$25,974$24,467$22,925 GDP per Capita (PPP adjusted)**
--2.2%3.5%3.3% GDP per Capita Growth Rate (%, 2005 prices) 15.2
(33.2%) 79.9 (40.1%) 70.9 (43.2%) 62.5 (43.4%) 57.2 (42.9%) Exports
(Goods & Services)** $B* (As Percentage of GDP) 13.8 (30.1%)
84.0 (42.1%) 73.6 (44.8%) 62.0 (43.0%) 57.6 (43.2%) Imports (Goods
& Services)** $B* (As Percentage of GDP)
7.6%6.2%7.3%8.4%9.0%Unemployment Rate (%) Slide 6 Source: Ministry
of Finance Main Economic Indicators (con.) 2008200720062005Criteria
78.3%79.8%85.5%94.3%Total Gross Debt (Percentage of GDP)
43.4%44.2%45.0%45.5% Government Expenditure (Percentage of GDP)
1.1%2.8%5.1%3.2%Current Account Surplus (% of GDP)
3.8%3.4%-0.1%2.4%Inflation Rate ( CPI, end of year) Slide 7 Source:
Ministry of Finance Main Economic Indicators (con.) About Credit
Rating: The governments credit rating reflects the economys level
of risk and affects banks, companies and financial bodies in the
market. The rating creates a ceiling which acts as a benchmark to
their bond pricing. Credit rating indicates the macro-economic
status of an economy and affects foreign investors decisions
whether to invest in the market. Overseas Bonds Forecast Domestic
Bonds TermRating Firm Rating A1 Stable A1Long Moody's P1-Short A
Stable AA-Long Standard & Poor's A-1A-1+Short A Stable A+Long
Fitch F1-Short Slide 8 GDP and Business GDP (Annual rate of change
(%), in Constant Prices) In the past few years, Israels economy has
enjoyed high growth rates. Despite the current economic crisis, Q2
shows signs of recovery. * Estimate. Source: Ministry of Finance.
Slide 9 GDP Growth Israel compared to Advanced Economies* (Annual
rate of change (%), in constant prices) * Weighted average: US 39%,
Euro area 46.5%, Japan 3%, UK 5%, Asian Newly Industrialized
countries 6.5% Source: Ministry of Finance. Since 2004, Israels
growth rate has exceeded the average growth rate of advanced
economies. Slide 10 Major GDP Components (Annual rate of change
(%), in constant prices) Source: Ministry of Finance Slide 11
Exports of Goods and Services ( $B ) Slide 12 Israels Main Trading
Partners (US$ Billions, excluding diamonds) Source: Central Bureau
of Statistics 2008 EXPORT IMPORT 2007 China is becoming a leading
trade partner for Israel Slide 13 Net Foreign Investments in Israel
(B$) Source: Ministry of Finance Slide 14 Unemployment and
Participation (As % of Total Labor Force) Containment and
Breakthrough, Israels Economic Policy, includes Encouragement of
employment and job creation through an increase of the Chief
Scientists budget, renovation of educational institutions and
budgeting of the Investment Encouragement Law. Source: Ministry of
Finance Slide 15 Inflation Rate (Rate of Change in CPI, end of
year) Source: Central Bureau of Statistics, Ministry of Finance The
Consumer Price Index (CPI) grew by 3.8% during 2008. * July 2009
index compared to July 2008 * Slide 16 Inflation Rate Worldwide
(Rate of Change in CPI, end of 2008) Inflationary pressures in
Israel have decreased, as a result of the world crisis. 3.8%
Sources: Central Bureau of Statistics, OECD Slide 17 2008Criteria +
4.0% Real GDP + 4.4% Business GDP + 3.0% Exports + 3.9% Private
Consumption + 2.8% Public Consumption + 5.1% Investment in Fixed
Assets Source: Ministry of Finance Growth of Main GDP Components
2008 Slide 18 Balances Budget Deficit and General Government
Expenditure Current Account and Net Foreign Debt Gross Public Debt
Gross Tax Burden Back to Contents Press for desired slide or
continue: Slide 19 Gross Public Debt (as percentage of GDP) Source:
Ministry of Finance Since 2003, the gross public debt has been on a
downward trend. Slide 20 Source: Ministry of Finance Budget Deficit
and General Government Expenditure Budget Deficit General
Government Expenditure (% of GDP) Slide 21 Current Account Balance
and Net Foreign Debt * As percentage of 2007 GDP Source: Ministry
of Finance. In 2003, current account turned positive, conversely
with the decrease of the net foreign debt. Current Account Surplus
(% of GDP) Net Foreign Debt (% of GDP) Slide 22 Source: Ministry of
Finance, OECD Gross Tax Burden (as % of GDP) Tax burden has been in
the vicinity of OECD average since 2003 OECD countries average:
26.4% (as of 2008) Slide 23 Central Bank Interest Rates Israel vs.
U.S.A Source: Bank of Israel (BOI), Federal Reserve Bank of Israel
Rate (BOI) U.S. Federal Funds Rate Coinciding with the FEDs low
interest rate,BOI interest rate continues to decrease. Coinciding
with the FEDs low interest rate, BOI interest rate continues to
decrease. Slide 24 NASDAQ & Tel Aviv 100 (monthly average)
Source: Tel Aviv Stock Exchange (TASE), World Federation of
Exchanges (WFE) Tel Aviv 100 reacts to the current events similarly
to the NASDAQ, yet less drastically. Slide 25 Source: World
Economic Forum, Global Competitiveness Index, 2008-9 Global
Competitiveness Index, 2008-2009 The World Economic Forum Ranked
Israel 23 rd Out of 134 Countries Slide 26 Global Competitiveness
Index, 2008/9 SELECTED CATEGORIES Venture Capital Availability
Source: World Economic Forum, Global Competitiveness Index, 2008-9
Availability of Scientists & Engineers Quality of Scientific
Research Institutions Company Spending on R&D RANK Slide 27
Strength of Investor Protection Source: World Economic Forum;
Global Competitiveness Index, 2008-9 Availability of Latest
Technologies Utility Patents Legal Rights Index RANK Global
Competitiveness Index, 2008/9 SELECTED CATEGORIES (con.) Slide 28
Countries that have been invited for open discussions for joining
the OECD *GCI:Provides a holistic overview of factors critical to
productivity and competitiveness *NRI: Measures the level of ICT
(Information and Communication Technologies) development of nations
Source: World Economic Forum; Global Competitiveness Index (GCI)
2008-2009, Global Information Technology Report 2008-2009 The
Networked Readiness Index 20082009 Business Competitiveness Index
2008-9 Israels Rank in Leading Indices 1 3 6 13 18 25 29 31 39 46
54 59 69 74 Slide 29 Israel and the OECD Real GDP growth in 2007-8
Unemployment Rate in 2007-8 Press for desired slide or continue:
Back to Contents GDP Based on PPP per Capita in 2006 Slide 30 Real
GDP Growth (Annual percentage of change, partial list) Source:
Ministry of Finance, IMF 07 08 As many OECD countries were highly
influenced by the recession in 2008, Israel only experienced a
relatively mild decay in growth rate. 2007: 5.3% 2008: 4.0% Slide
31 Unemployment Rate (harmonized) Source: OECD, Ministry of Finance
08 07 08 07 08 07 08 07 Slide 32 GDP per capita based on
purchasing-power-parity (PPP) 2007, (in US$) 32,752 26,314 Source:
OECD Slide 33 International Treaties Israels Free Trade Agreements
Avoidance of Double Taxation Agreements Cooperation in Industrial
R&D Agreements Protection of Investments Agreements
International Organization Memberships Press for desired slide or
continue: Back to Contents Slide 34 Israels Free Trade Agreements *
Member states of the common market of the south, not yet in force
1985 1992 1997 European Union (Association Agreement) USA EFTA
Canada Turkey Mexico MERCOSUR* 1999 2000 2007 QIZ Agreement
EgyptJordan Slide 35 Avoidance of Double Taxation Agreements
AustriaBelarusBelgiumBrazilBulgariaCanadaChina Czech Republic
CroatiaDenmarkEstoniaEthiopiaFinlandFranceGermanyGreeceHungaryIndiaIrelandItalyJamaicaJapanLatviaLithuania
* The agreement with Estonia has only been signed initially Slide
36 (con.)SwitzerlandThailand The Netherlands TurkeyUkraine United
Kingdom UzbekistanUSALuxembourgMexicoMoldovaNorwayPhilippines
Portugal * PolandRomaniaRussiaSingaporeSlovakiaSlovenia South
Africa** South Korea SpainSweden * The agreement with Portugal has
been recently ratified ** Not yet ratified by South Africa.
Avoidance of Double Taxation Agreements Slide 37 Cooperation in
Industrial R&D Agreements Belgium Canada China France Hong Kong
Italy Netherlands Portugal Spain UK USA Singapore Ireland Sweden
Finland Germany IndiaAustria Korea Slide 38 Protection of
Investment Agreements CroatiaCyprus Czech Republic
El-SalvadorEstoniaGeorgiaGermany
AlbaniaArgentinaArmeniaAzerbaijanBelarusBulgariaChina
GuatemalaIndiaKazakhstanKoreaLatvia Slide 39
TurkmenistanUkraineUruguayUzbekistan Protection of Investment
Agreements (con.) LithuaniaMoldovaPolandRomaniaSlovakiaSlovenia
South Africa *appending ratification ThailandTurkey Slide 40 Main
International Economic Organizations Membership: Israel is a member
in leading Israel is a member in leading international : economic
organizations: WBGWBG IMFIMF WTOWTO OECD (candidate)OECD
(candidate) A more detailed list: BIS | BSEC (observer) | CE
(observer) | CERN (observer) | EBRD | FAO | IADB | IAEA | WBG IBRD,
IFC, IDA, MIGA | ICAO | ICC | ICCT (signatory) | ICFTU | IFAD |
IFRCS (observer) | ILO | IMF | IMO | Interpol | IOC | IOM | ISO |
ITU | OAS (observer) | OECD (candidate) | OPCW (signatory) OSCE
(partner) | PCA | UN | UNCTAD | UNECE | UNEP | UNESCO | UNHCR |
UNIDO | UPU | WCO | WFP | WHO | WIPO | WMO | WTOO | WTRO | WTO |
ICSID Slide 41 Relevant Sites Back to Contents Government
Institutions: Ministry of Finance OECD Profile on Israel Bank of
IsraelBank of Israel (BOI) Central Bureau of Statistics Israeli
Government Portal Israel Securities Authority Ministry of Industry,
Trade and Labor www.financeisrael.mof.gov.il International Affairs
Department Homepage: Slide 42 We welcome your feedback! Mr. Assaf
Luxembourg International Affairs Department Ministry of Finance
Jerusalem Israel Start Again Visit our website!
www.financeisrael.mof.gov.il Mr. Roni Hershkovitz Acting Director
Overseas Economic Information International Affairs Department
Ministry of Finance Jerusalem Israel Contact Us!
[email protected]