Israel Economy
March 2011
Israel- Macro Economic indicators, 2005-2010
Criteria
2005
2006
2007
2008
2009
2010
134.3
146.2
168
202.3
195.4
217*
5.1%
5.7%
5.4%
4.2%
0.8%
4.5%*
23,390
25,080
26,730
27,960
27,930
28,680*
Exports of Goods &
Services (B$)
57.2
62.5
71.3
81.1
67.7
80.5
Imports of Goods &
Services (B$)
57.6
61.7
73.5
84.0
62.9
76
Unemployment Rate (%)
9.0%
8.4%
7.3%
6.1%
7.5%
6.7%
Inflation Rate (Year End)
2.4%
-0.1%
3.4%
3.8%
3.9%
2.6%
Current Account balance
(% of GDP)
3.1%
5.1%
2.9%
0.8%
3.9%
3.2%*
GDP (B$ -at current market
prices)
GDP Real Growth rate (%)
GDP per Capita (PPP, $)
Source: EIU, CBS, Bank of Israel * Forecast **IEICI Forecast
GDP Growth (%)
Israel
5.7
World
Euro area
USA
5.4
4.1
3.1 2.7
2
4.5
4.2
3.9
2.8
1.9 2.3
Japan
4.0
3.8
2.9
1.5
0.8
0.4 0
3.8
3.1
2.7
1.9
1.6
2010
2011*
1.6
-1.2
-2.3
-2.6
-4.1
-6.3
2006
Source: EIU
2007
2008
2009
*Forecast
Real GDP Growth
(annual % of change ,2009)
While many OECD countries were severely affected by the global
economic crisis, Israel still experienced a positive growth, and only a
relatively mild decline in its multi year growth rate.
Source: Ministry of Finance
Israel’s Credit Ratings
Source: Ministry of Finance
GDP Quarterly Growth
Source: eiu
Gross Public Debt
(as % of GDP)
100
Since 2003, government debt has
been on a consistent downward
trend, only interrupted by the
extraordinary circumstances
surrounding the 2009 global
economic crisis
95
90
85
82.6%
80
75.8% 75.2%
77.7%
78.7%
75
74.2%
70.6%
70
66.2%
65
61.5%
60
56.2%
55
50
2006
2007
2008
2009
2010*
2011*
2012*
2013*
2014*
2015*
Source: EIU
Expenditure on R&D
(as % of GDP,2008)
Source: Ministry of Finance
Unemployment Rate
(harmonized, 2009)
Source: Ministry of Finance
Goods & Services Export Development
(Including Diamonds , B $)
Services Export
Merchandise Export
23.8
25
22
21.1
19.3
17.5
16.0
15.4
12.9
12.2
13.7
8.0
4.6
2.7
6.0
12.7
1980
1990
30.9
27.7
27.2
29.9
2000
2001
2002
2003
19.5
1995
36.3
39.7
43.3
2004
2005
2006
49.8
2007
56.6
2008
51
2009
56
2010
ISRAEL- Goods Export 2010
North America
29%
$12.4B
Latin America
6%
EU
30%
(excluding diamonds)
Rest of Europe
6%
$2.6B
$12.7B
Asia
20%
$8.4B
Africa
3%
$1.3B
Rest of World
6%
$2.3B
$2.5B
A shift from traditional market to Asian markets
Exports of Goods by Region
(excluding Diamonds)
E.U.
Asia
U.S.
Rest Of World
100%
90%
22.0%
22.5%
22.2%
29.7%
28.2%
27.8%
16.3%
14.8%
19.9%
32.1%
34.4%
30.1%
2000
2005
2010
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Central Bureau of Statistics
13
Israel’s Main Trading Partners
2010
(US$ Billions, excluding diamonds)
5.9
11.7
1.2
0.7
1.7
1.5
1.2
1.8
0.6
Ja
pa
n
2.0
In
di
a
1.8
1.8
1.3
Fr
an
ce
2.4
Tu
rk
ey
d
th
er
la
n
1.7
Ne
er
m
an
y
1.7
G
Ch
in
a
U.
S.
1.7
2.1
Ita
ly
3.7
U.
K.
4.7
Export
Import
China has become a leading trade partner for Israel
Source: Central Bureau of Statistics
14
Israel - Cyprus trade 2003-10 (M$)
881
775
623
567
541
491
153
2005
2006
69
65
32
25
2007
Exports
2008
Imports
44
2009
2010
Israel Exports to Cyprus – main sectors, 2010
SECTOR
M$
% change 10/09
% of total
Chemicals
669
33%
86%
Plastic and Rubber
9.7
0%
1%
Machinery & Electrical Eq.
9.2
34%
1%
Agriculture
7.6
-14%
1%
Wood, furniture etc.
7.5
35%
1%
Mining and Quarrying
5.9
-17%
1%
Other
66
60%
9%
Total Export
755
37%
100%
Growth in Export of Goods
2010
(US$ Millions, excluding diamonds)
98%
59%
41%
30%
22%
18%
17%
16%
12%
10%
6%
1%
U
.S
.
S.
K
or
ea
B
el
gi
u
m
in
Sp
a
Fr
an
ce
It a
ly
nd
he
rla
an
y
N
et
er
m
G
Tu
rk
ey
l
B
ra
zi
a
In
di
U
.K
.
C
hi
na
-1%
China, India and Brazil are the most rapidly growing
markets for Israeli export
Source: Central Bureau of Statistics
14
Export of Goods by Sector
2010 in comparison to 2009 (B$)
Industry
2009
2010
% change % of total
Hi-Tech Industries
17.9
20.2
12.6%
49.5%
Med-Hi Tech Industries
9.7
11.7
20.2%
29%
Med-Low Tech Industries
5.4
6.7
25.4%
16.5%
Low-Tech Industries
2.0
2.1
6.2%
5%
Total (excluding diamonds)
35.0
40.7
16.3%
100%
Industry Export Growth, By Sector (M$)
25,000
In the past decade the industrial export was mainly
affected by the rapid growth of the Hi-Tech industry
20,000
15,000
10,000
5,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Hi-Tech Industries
Med-Hi Tech Industries
Med-Low Tech Industries
Low-Tech Industries
Growth of Main Hi-tech sectors, 1995-2010
In the past decade the industrial export was mainly affected by the rapid growth in
equipment for control and supervision and Pharmaceutical products
Main Hi-tech services sectors, 2002-2010 (m$)
6,000
5,000
4,000
3,000
2,000
1,000
2002
2003
2004
2005
2006
Computer Services
2007
2008
R&D Services
2009
2010
Main Hi-tech sectors
TOTAL HIGH- TECH EXPORTS 2010: 25B$
Source: CBS & IEICI Calculations’ excluding R&D
Israel’s Free Trade Agreements
1985
USA
Egypt
1992
EFTA
Jordan
1997
Turkey
1997
Canada
1999
Mexico
2000
European Union
QIZ Agreement
(Association Agreement)
2007
MERCOSUR*
* Member states of the common market of the south, not yet in force
37
Avoidance of Double Taxation Agreements
Luxembourg
Russia
Switzerland
Mexico
Singapore
Thailand
Moldova
Slovakia
The Netherlands
Norway
Slovenia
Turkey
Philippines
South Africa**
Ukraine
Portugal *
South Korea
United Kingdom
Poland
Spain
Uzbekistan
Romania
Sweden
USA
* The agreement with Portugal has been recently ratified
** Not yet ratified by South Africa.
39
Cooperation in Industrial R&D Agreements
Austria
India
Belgium
Ireland
UK
Canada
Italy
USA
China
Korea
Finland
Netherlands
France
Portugal
Germany
Singapore
Hong Kong
Sweden
Spain
40
Protection of Investment Agreements
Albania
Croatia
Guatemala
Argentina
Cyprus
India
Armenia
Czech Republic
Kazakhstan
Azerbaijan
El-Salvador
Korea
Belarus
Estonia
Latvia
Bulgaria
Georgia
China
Germany
41
Protection of Investment Agreements
Lithuania
South Africa
Moldova
Thailand
Poland
Turkey
Romania
Slovakia
Slovenia
Turkmenistan
Ukraine
Uruguay
Uzbekistan
42
Israel in Global Perspective
Doing Business Index (World Bank)/183
Singapore
1
Hong Kong
2
New Zealand
3
United Kingdom
4
United States
5
Australia
Iceland
10
15
France
26
Switzerland
27
Israel
29
Netherlands
30
Austria
Cyprus
Spain
32
37
49
Italy
80
China
79
Greece
Russia
India
Chad
109
123
134
183
Israel in Global Perspective
The Enabling Trade Index- WEF/125
Singapore
Hong Kong
Denmark
Sweden
Switzerland
New Zealand
Australia
France
Japan
Israel
S. Korea
Cuprus
Spain
China
Italy
Greece
India
Russia
Burundi
1
2
3
4
5
10
15
20
25
26
27
31
32
48
51
55
84
114
125
Israel in Global Perspective
The Global Competitiveness Index- WEF/139
Switzerland
Sweden
Singapore
United States
Germany
Canada
France
S.Korea
New Zealand
Israel
Malaysia
China
Cyprus
Spain
Italy
India
Brazil
Russian Federation
Greece
Chad
1
2
3
4
5
10
15
22
23
24
26
27
40
42
48
51
58
63
83
139
Israel in Global Perspective
The Global Competitiveness Index- WEF/133
Israel in Global Perspective
The Global Competitiveness Index- WEF/133
Israel in Global Perspective 2010
IMD World competitiveness Yearbook 2010
The institute for
Management
Development
ranked Israel at the
17th Place, Out of
58 countries
Israel was ranked
24th at 2009
Israel in Global Perspective 2010
IMD World competitiveness Yearbook 2010
Israel in Global Perspective 2010
IMD World competitiveness Yearbook 2010
Small country - great spirit!
Israel's technology advantages:

Israel has an entrepreneurial spirit

Israel has the mentality of early adopters

Israel has a creative fusion between
academy and business

Israel has a defense technology
commercialization

Israel has highly skilled workforce

Israel has a powerful VC community

Israel has investment and R&D incentives
Thank you
Shauli katznelson
Chief Economist
shauli@export.gov.il
Inflation Rate Worldwide
(Annual rate of change in CPI)
Source: Ministry of Finance
Budget Deficit & General Government Expenditure
(as % of GDP)
Source: Ministry of Finance