STATE OF ISRAEL
MINISTRY OF FINANCE
Chief Economist Department – Research, State Revenue & International Affairs
Economic Highlights Presentation
4th Quarter 2013
( As of January 20th)
In any case of information derived from sources external to the Ministry of
Finance, such sources are mentioned at the bottom of each item
www.financeisrael.mof.gov.il
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
2
Economic Figures
Criteria
2011
2012
2012 Q3
2012 Q4
GDP
(Current prices in $B)*
258.4
257.5
64.0
66.0
68.2
72.9
74.9
Real GDP growth rate
(% change)
4.6%
3.4%
4.2%
3.6%
2.5%
4.7%
2.3%
$33,288
$32,565
8,081$
8,294$
8,525$
9,077$
9,282$
2.7%
1.5%
2.3%
1.5%
0.5%
3.0%
0.4%
Exports (goods & services), $B*
91.7
35.5%
93.1
36.2%
35.6%
35.2%
34.2%
33.8%
29.2%
Imports (goods & services), $B*
93.0
92.6
23.1
21.9
22.0
22.6
23.7
GDP per capita
(Current $)
GDP per capita growth rate
(%, constant prices)
(As % of GDP)
(As % of GDP)
Unemployment rate**
*Using a periodic average exchange rate
** For available months
Sources: CBS, IMF
22.8
23.3
2013 Q1 2013 Q2
23.3
24.6
2013 Q3
21.9
36.0%
36.0%
36.2%
33.2%
32.2%
31.0%
31.7%
7.0%
6.9%
6.8%
6.9%
6.6%
6.7%
6.0%
3
Economic Figures
Criteria
2007
2008
2009
2010
2011
2012
2013
Public debt
(As % of GDP)
74.7%
73.2%
75.3%
71.7%
69.8%
68.4%
-**
General government
expenditure
(As % of GDP)
42.6%
41.6%
41.8%
41.0%
40.4%
40.2%
40.4%
Current account surplus
(As % of GDP)
3.2%
1.4%
3.8%
3.1%
1.3%
0.3%
-**
Inflation rate
(CPI, yearly average, % change)
0.5%
4.6%
3.3%
2.7%
3.5%
1.7%
1.8%
Budget deficit
(As % of GDP)
0.0%
2.1%
4.9%
3.5%
3.1%
3.9%
3.2%
* MoF Estimates
** No available data correct to date of publication.
4
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
5
GDP and Business GDP
Annual rate of change, constant prices, 2005
6
GDP Growth
Israel compared to advanced economies, annual rate of change, constant prices
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 1.1% growth in it’s GDP.
* MoF forecast, Euro stat and OECD forecast
Source: CBS, OECD Stat
7
GDP Components
Real Annual Percentage Change
Effects of the global
economic crisis
8
GDP per Capita
$ U.S, Current prices, Current PPP, 2012
Source: OECD
9
Output Gap
As percentage of Potential GDP, 2012
The actual - potential GDP Difference.
Positive index means that actual output is higher than potential.
Additional Sources: OECD Estimates
10
Stock Exchange Indices
Percentage Change, end of period relative to end of previous period
Additional Sources: TASE, Bloomberg
11
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
12
Exports of Goods and Services
As a share of GDP
Effects of the global
economic crisis
13
Main Trading Partners
$ US Billions, 2013
* The data on trade with Hong-Kong is added to the data regarding China
Source: Central Bureau of Statistics
14
Main Export Destinations
As a share of total exports
Source: Central Bureau of Statistics
15
Current Account Surplus
As % of GDP
* 2013 - first 3 quarters
Source: Central Bureau of Statistics
16
Foreign Investments
$ US Billions
30.0
28.4
25.0
20.0
18.2
15.3 14.8
15.0
14.0 14.0
10.9
10.5
10.4
10.0
5.0
9.5
7.0
4.8
3.3
10.8
8.8
7.9
4.3
10.8
4.4
5.5
2.9
2.3
0.0
2003
2004
Total Investments
2005
2006*
2007
2008
2009
2010
2011
2012
2013
Direct Investments
* In 2006, a large acquisition by Teva Pharmaceutical Industries Ltd. was included in the data.
** 2013 first 3 quarters at annualized
Source: Central Bureau of Statistics
17
Exchange Rates
31 December 2013 vs 31 December 2012
The change in the specified currency relative to the $ US
A decrease means an appreciation of the specified currency relative to the $ US
Source: Pacific Exchange Rate Service
18
Terms of Trade
2005 average = 100
Terms of Trade = Export Prices to Import Prices Ratio
Source: Central Bureau of Statistics
19
Israel’s Free Trade Agreements
1985
1992
USA
2013
Colombia*
QIZ Agreements
1998
Jordan
2004
Egypt
EFTA
1997
Turkey
1997
Canada
1999
Mexico
2000
European Union (Association Agreement)
2007
MERCOSUR
* Yet to be ratified
More comprehensive information is available on the Israel Ministry of Finance website
20
Bilateral Investment Treaties
Albania
Cyprus
Hungary*
Argentina
Czech Republic
India
Armenia
El Salvador
Kazakhstan
Azerbaijan
Estonia
Korea
Belarus
Ethiopia
Latvia
Bulgaria
Georgia
Lithuania
China
Germany
Moldova
Croatia*
Guatemala
Macedonia*
*Comprehensive information is available on the Israel Ministry of Finance website
21
Bilateral Investment Treaties
Turkey
Montenegro
Poland
Turkmenistan
Ukraine
Romania
Uruguay
Serbia
Uzbekistan
Slovakia
Slovenia*
South Africa*
Thailand
*Comprehensive information is available on the Israel Ministry of Finance website
22
Economic Organizations
Membership in main international economic organizations
Israel is a member of leading international economic organizations:
• United Nations Organizations
• United Nations Agencies
• World Bank Group
• International Monetary Fund
• OECD
• WTO
• Regional Organizations
• Inter-Governmental Organizations
More comprehensive information is available on the Israel Ministry of Finance website
23
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
24
Unemployment and Participation
As % of total labor force
Since the 2nd quarter of 2009 unemployment is relatively decreasing, with a gradual increase in the
participation rate since the beginning of 2010.
*Available data.
Source: Central Bureau of Statistics
25
Unemployment Rate
Latest available data
Additional Sources: OECD
26
Job Creation
Change in the number of employees
Effects of the global
economic crisis
Annual average relative to previous year average.
* January to November average.
Source: Central Bureau of Statistics
27
Employment Rate
People aged over 15, latest available quarterly data
Additional Sources: OECD, Euro Stat
28
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
29
General Government Expenditure
As % of GDP
Source: CBS
30
General Government Tax Burden
As % of GDP
Source: Central Bureau of Statistics, OECD
31
General and Central Budget Deficit
As % of GDP
Source: CBS, MoF
32
Public Debt
As % of GDP
Effects of the global
economic crisis
Source: CBS, MoF
33
Public Debt
As % of GDP, international comparison
Source: CBS, MoF, OECD
34
Avoidance of Double Taxation
Austria
Denmark
India
Belarus
Estonia
Ireland
Belgium
Ethiopia
Italy
Brazil
Finland
Jamaica
Bulgaria
France
Japan
Canada
Georgia
Latvia
China
Germany
Lithuania
Croatia
Greece
Luxembourg
Czech Republic
Hungary
Malta
More comprehensive information is available on the Israel Ministry of Finance website
35
Avoidance of Double Taxation
Mexico
Russia
Taiwan
Moldova
Singapore
Thailand
Netherlands
Slovak Republic
Turkey
Norway
Slovenia
UK
Panama*
South Korea
Ukraine
Philippines
South Africa
USA
Poland
Spain
Uzbekistan
Portugal
Sweden
Vietnam
Romania
Switzerland
* Yet to be ratified
More comprehensive information is available on the Israel Ministry of Finance website
36
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payment
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
37
Inflation Rate
Rate of change in consumer price index
Source: Central Bureau of Statistics
38
Interest Rate
Source: Bank of Israel
39
Central Bank’s Interest Rates
International Comparison
Source: Specified Countries’ Central Banks
40
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payments
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
41
Industrial Production
Annual Growth, 2013 average relative to 2004 average
Total industrial production grew by 3.7%
Source: Central Bureau of Statistics
42
Industrial Export
Current U.S. $ Billions, and the share of high tech and mid high tech sectors in the Israeli goods exports
81.1%
80.1%
80.3%
77.4%
76.6%
79.5%
80.9%
76.3%
75.3%
73.2%
75.4%
72.5%
Source: Central Bureau of Statistics
43
Israel is a World Leader in Science,
Technology, and Innovation
5
Civilian R&D as % of GDP, 2011
4.4
4
3.8
3
2.8
2.3
2.0
2
1.9
1.8
1.8
1.7
1.7
1.6
1.3

1st in R&D expenditure as % of GDP*

1st in quality of scientific research institutions**

1st for entrepreneurship being widespread amongst its managers*

2nd in public expenditure on education*

8th in venture capital availability**

5th in PCT patents applications per million population**

6th for strength of investor protection**

6 Israelis in the last 10 years have been awarded Nobel Prizes in
the fields of Economics or Chemistry
1.3
Global Competitiveness Report 2013-2014
Italy
Spain
Norway
Ireland
Canada
United Kingdom
Czech Rep.
Belgium
France
Germany
Finland
Israel
0
EU27
1
“The country’s main strengths remain its world-class capacity for innovation
(4th), which rests on highly innovative businesses that benefit from the presence
of the world’s best research institutions geared toward the needs of the business
sector. Israel’s excellent innovation capacity, which is supported by the
government’s public procurement policies, is reflected in the country’s high
number of patents (5th). Its favorable financial environment, particularly evident
in the ease of access to venture capital (8th), has contributed to making Israel an
innovation powerhouse..”
Source: OECD. * International Institute for Management Development (IMD) Global Competitiveness Yearbook 2011. ** World Economic Forum (WEF)
Global Competitiveness Report 2013-2014.
44
Israel in IMD Rankings
IMD World Competitiveness Yearbook 2013
(2) USA 1
(3) Switzerland 2
(1) Hong Kong 3
(5) Sweden 4
(4) Singapore 5
(8) Norway 6
(6) Canada 7
(16) UAE 8
(9) Germany 9
(10) Qatar 10
(7) Taiwan 11
(13) Denmark 12
(12) Luxemburg 13
(11) Netherlands 14
(14) Malaysia 15
The
Institute
for
Management
Development ranked Israel 19th out of
60 countries for 2013.
Israel
has
been
ranked
1st
entrepreneurship and 9th at economy
resilience.
(15) Australia 16
(20) Ireland 17
(18) United Kingdom 18
(19) Israel 19
(17) Finland 20
Source: IMD World Competitiveness Yearbook 2013
at
45
Israel in IMD Rankings
IMD World Competitiveness Yearbook 2012
Israel’s ranking compared to other IMD countries,
Business Efficiency and Infrastructure
Source: IMD World Competitiveness Yearbook 2012
Israel’s ranking compared to other IMD countries,
Economic Performance and Government Efficiency
46
Israel in WEF Rankings
World Economic Forum Global Competitiveness Index 2013-2014
The World Economic Forum ranked Israel 27th
out of 148 countries for 2013-2014 in terms of
competitiveness.
The Forum also ranked Israel:
1st in Quality of scientific research institutions
4th in Capacity for Innovation
5th in Firm-level technology absorption
6th in Strength of investor protection
6th in Nature of competitive advantage
6th in Company spending on R&D
5th in PCT patents, applications/million pop.
And 8th in Venture Capital Availability
Source: World Economic Forum Global Competitiveness Index 2013-2014
47
Cooperation in Industrial R&D
North America
New York
Massachusetts
Maryland
Virginia
Wisconsin
Colorado
Illinois
Oregon
BIRD (Foundation)
Ontario CIIRDF (Foundation)
South America
Argentina
Uruguay
Brazil
Europe
France
Russia
Italy ( and Trento county)
Asia
Germany
China (Shanghai, Jiangsu,
Greece
Shenzhen, Federal)
Czech Republic
India
Bulgaria
Lithuania
Slovenia
SIIRD-Singapore (Foundation)
Denmark
KORIL-RDF-Korea (Foundation)
Hungary
Turkey
Portugal
Finland
Sweden
Australia
Ireland
(Victoria)
Spain
Cyprus
Netherlands
* Through EUREKA (40 country Multilateral
Initiative)
More comprehensive information is available on the Israel Ministry of Finance website
48
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payment
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
49
Learn More
Visit the Israel Ministry of Finance English
website for more information:
About the Ministry
Economic Overview of Israel
Ministry of Finance publications and reports
Other publications and reports on the Israeli economy
Ministry press releases
50
Learn More
Click to open:
Israel Central Bureau of Statistics
Bank of Israel
Ministry of Economy
Ministry of Foreign Affairs
Israel Government Portal
51
Table of Contents
1
Main Indicators
2
Real Economy
3
Foreign Trade and Balance of Payment
4
Labor Market
5
Fiscal Stance
6
Price Stability and Monetary Policy
7
Innovative Economy
8
Learn More
9
Contact
52
Contact
Mr. Oded Keneresh, CPA
Mr. Daniel Hadow Ericson
Dr. Amichai Fishler
Overseas Economic Information
Chief Economist Department
Ministry of Finance
State of Israel
Follow us on Twitter
Send us an email:
odedk@mof.gov.il
danielh-e@mof.gov.il
amichai@mof.gov.il
Follow us on Flickr
Visit our Website
Follow us on Linkedin
Follow us on YouTube
Subscribe to our RSS Feeds
Subscribe to our Newsletters
53