STATE OF ISRAEL
MINISTRY OF FINANCE
International Affairs Department
Economic Highlights Presentation
2nd Quarter 2012
In any case of information derived from sources external to the Ministry of
Finance, such sources are mentioned at the bottom of each item
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
2
Main Economic Indicators
Economic Figures
GDP and Business GDP
Major GDP Components
Exports of Goods and Services
Main Trading Partners
Gross Domestic Capital Formation
Foreign Investments
Unemployment and Participation
Consumer Price Index
Inflation Rate
Israel’s Credit Ratings
3
Economic Figures
Criteria
2010
2011
2011 Q2
2011 Q3
2011 Q4
2012 Q1
GDP
(constant prices, 2005, in $B)*
204.6
214.2
53.4
53.9
54.3
54.7
Real GDP growth rate
(% change)
4.8%
4.7%
3.7%
3.3%
3.2%
2.9%
$29,602
$31,005**
6,685$
6,707$
6,725$
6,744$
2.9%
2.8%
2.0%
1.4%
1.1%
1.1%
GDP per capita, based on PPP
(Current international $)
GDP per capita growth rate
(%, 2005 prices)
Exports (goods & services), $B*
(As % of GDP)
Imports (goods & services), $B*
42.9%
87.7
42.9%
91.9
44.2%
23.6
42.7%
23.0
41.6%
22.6
23.9
82.3
91.0
23.3
22.8
22.5
24.0
6.7%
(As % of GDP)
40.2%
42.5%
43.6%
42.3%
41.4%
Unemployment rate
8.3%
7.0%
7.0%
7.0%
6.8%
* Using a public exchange rate of 1USD=3.6NIS (2011 average)
** Estimated
Additional Sources: IMF
---
4
Economic Figures
Criteria
2006
2007
2008
2009
2010
2011
Public debt
(As % of GDP)
84.3%
77.8%
77.1%
79.3%
76.3%
74.7%
General government expenditure
(As % of GDP)
44.7%
43.6%
43.0%
43.0%
42.6%
42.3%
Current account surplus
(As % of GDP)
5.1%
2.9%
0.9%
3.6%
2.9%
0.1%
Inflation rate
(CPI, yearly average, % change)
2.1%
0.5%
4.6%
3.3%
2.7%
3.5%
Budget deficit
(As % of GDP)
0.9%
0.0%
2.2%
5.2%
3.7%
3.3%
5
GDP and Business GDP
Annual rate of change, constant prices, 2005
6
Major GDP Components
Annual rate of change, constant prices, 2005
Global economic crisis
7
Exports of Goods and Services
US $ Billions, constant prices, 2005
Global economic crisis
* Using a public exchange rate of 1USD=3.6NIS (2011
average)
8
Main Trading Partners
US $ Billions, 2011
* Since July 1997 the data on trade with Hong-Kong is added to the data on China
Additional Sources: Central Bureau of Statistics
9
Main Trading Partners
US $ Billions
Additional Sources: Central Bureau of Statistics
10
Gross Domestic Capital Formation
As % of GDP
11
Foreign Investments
US $ Billions
* 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries Ltd.
12
Unemployment and Participation
As % of total labor force
Since the 2nd quarter of 2009 unemployment is relatively decreasing, with a relative increase in
participation rate in the beginning of 2010. In the 1st quarter of 2012 unemployment reached an
historic low level of 6.7%.
13
Consumer Price Index
Last 12 monthly averages, 2010=100
Additional Sources: Central Bureau of Statistics
14
Inflation Rate
Rate of change in consumer price index, yearly average
15
Israel’s Credit Ratings
Rating Firm
Moody's
Standard & Poor's
Fitch
Term
Domestic Bonds
Rating
Long
A1
Short
-
Long
AA-
Short
A-1+
Long
A+
Short
-
Forecast
Stable
Stable
Stable
Overseas Bonds
Rating
A1
P1
A+
A-1
A
F1
16
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
17
Balances
Gross Public Debt
Budget Deficit
General Government Expenditure
Current Account Surplus
Net Foreign Surplus
Gross Tax Burden
18
Gross Public Debt
As % of GDP
Global economic crisis
19
Budget Deficit
As % of GDP
20
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. On June 2012 Israeli cabinet the proposal to institute a twoyear budget on a regular basis
21
General Government Expenditure
As % of GDP
22
Current Account Surplus
As % of GDP
23
Net Foreign Surplus
As % of GDP
* Using a public exchange rate of 1USD=3.6NIS (2011
average)
24
Gross Tax Burden
As % of GDP
OECD countries average: 34.8%
(2008 average)
Additional Sources: OECD
25
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
26
International Comparisons
GDP Growth
Inflation Rates
Israel on IMD Rankings
Israel on WEF Rankings
Interest Rates: Israel & the U.S.
Stock Indices: NASDAQ & Tel-Aviv 100
27
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 0.8% growth in it’s GDP.
Additional Sources: IMF
28
Inflation Rates
Rate of change in consumer price index, yearly average (2011)
The Israeli economy demonstrated high stability compared to other countries throughout the global economic crisis.
Additional Sources: IMF
29
Israel on IMD Rankings
IMD World Competitiveness Yearbook 2012
The Institute for Management Development
ranked Israel 19th out of 59 countries for 2012.
Additional Sources: IMD World Competitiveness Yearbook 2012
30
Israel on IMD Rankings
IMD World Competitiveness Yearbook 2012
Resilience of the economy
Additional Sources: IMD World Competitiveness Yearbook 2012
Entrepreneurship
31
Israel on IMD Rankings
IMD World Competitiveness Yearbook 2012
Israel’s ranking compared to other IMD countries,
Business Efficiency and Infrastructure
Additional Sources: IMD World Competitiveness Yearbook 2012
Israel’s ranking compared to other IMD countries,
Economic Performance and Government Efficiency
32
Israel on WEF Rankings
World Economic Forum Global Competitiveness Index 2011-2012
The World Economic Forum ranked Israel 22nd
out of 142 countries for 2011-2012
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012
33
Israel on WEF Rankings
World Economic Forum Global Competitiveness Index 2011-2012
Quality of scientific research institutions
Venture capital availability
Utility patents per million population
Strength of investor protection
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012
34
Israel on WEF Rankings
World Economic Forum Global Competitiveness Index 2011-2012
Government procurement of advanced technology products
Firm-level technology absorption
Capacity for innovation
University-industry collaboration in R&D
Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012
35
Interest Rates: Israel & the U.S.*
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%.
=0
36
Stock Indices: NASDAQ & Tel-Aviv 100
Tel Aviv 100 corresponds with the NASDAQ to current events, with relatively stable reactions.
37
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
38
Israel in the OECD
Israel was invited as a full member in the OECD on May 10th, 2010, and officially joined in Sep. 10, 2010.
Expenditure on R&D
Real GDP Growth
GDP per Capita
Unemployment
39
Expenditure on R&D
As % of GDP, 2010 or latest available year
Israel is 1st in the OECD in expenditure on R&D (research & development) as % of GDP, demonstrating innovation,
development and creativity.
Additional Sources: OECD
40
Real GDP Growth
2011, end of period
Israel’s growth rate is higher then most OECD members.
Additional Sources: OECD
41
GDP per Capita
U.S $ Billions , Current prices, PPP, 2011 (or most recent data)
Additional Sources: OECD
42
Unemployment Rate
For 2011
Additional Sources: OECD
43
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
44
International Agreements
Israel’s Free Trade Agreements
Avoidance of Double Taxation
Cooperation in Industrial R&D
Bilateral Investment Treaties
Economic Organizations
45
Israel’s Free Trade Agreements
QIZ Agreements
1985
USA
1992
EFTA
2004
Egypt
1997
Turkey
1998
Jordan
1997
Canada
1999
Mexico
2000
European Union (Association Agreement)
2007
MERCOSUR
More extended information is available in the Israel Ministry of Finance website
46
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
More extended information is available in the Israel Ministry of Finance website
47
Avoidance of Double Taxation
Taiwan
Mexico
Russia
Moldova
Singapore
Netherlands
Slovak Republic
Norway
Slovenia
UK
Philippines
South Korea
Ukraine
South Africa
USA
Spain
Uzbekistan
Poland
Portugal
Romania
Sweden
Thailand
Turkey
Vietnam
Switzerland
48
More extended information is available in the Israel Ministry of Finance website
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 (Rusano, Skolkovo)
Italy
Asia
Germany
China( Shanghai, Jiangsu, Most)
Greece
India
Czech Republic
Taiwan
Bulgaria
Lithuania
SIIRD-Singapore (Foundation)
Slovenia
KORIL-RDF-Korea (Foundation)
Denmark
Hungary
Turkey
Portugal
Finland
Sweden
Australia
Ireland
(Victoria)
* Through EUREKA (40 country Multilateral
Initiative)
More extended information is available in the Israel Ministry of Finance website
49
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
Mongolia
More extended information is available in the Israel Ministry of Finance website
50
Bilateral Investment Treaties
Montenegro
Turkey
Poland
Turkmenistan
Romania
Ukraine
Serbia
Uruguay
Slovakia
Uzbekistan
Slovenia
South Africa
Thailand
More extended information is available in the Israel Ministry of Finance website
51
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
52
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
53
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
54
Learn More
Click to open:
Israel Central Bureau of Statistics
Bank of Israel
Ministry of Industry, Trade and Labor
Ministry of Foreign Affairs
Israel Government Portal
55
Table of Contents
1
Main Economic Indicators
2
Balances
3
International Comparisons
4
Israel in the OECD
5
International Agreements
6
Learn More
7
Contact
56
Contact
Mr. Roni Hershkovitz
Mr. Ori Kaufman
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