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

57.2

62.5

71.3

81.1

67.7

80.5

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, $)
Exports of Goods &
Services (B$)
Imports of Goods &
Services (B$)

Source: EIU, CBS, Bank of Israel * Forecast **IEICI Forecast

GDP Growth (%)

Source: EIU

*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

Israels Credit Ratings

Source: Ministry of Finance

GDP Quarterly Growth

Source: eiu

Gross Public Debt

(as % of GDP)
Since 2003, government debt has
been on a consistent downward
trend, only interrupted by the
extraordinary circumstances
surrounding the 2009 global
economic crisis

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 $)

ISRAEL- Goods Export 2010

North America
29%

B12.4$

Latin America
6%

EU
30%

(excluding diamonds)

Rest of Europe
6%
B2.6$

B12.7$

Asia
20%

B8.4$
Africa
3%
B1.3$

Rest of World
6%

$ 2.3B
B2.5$
A shift from traditional market to Asian markets

Exports of Goods by Region

(excluding Diamonds)

Source: Central Bureau of Statistics

13

Israels Main Trading Partners

2010
(US$ Billions, excluding diamonds)

China has become a leading trade partner for Israel

Source: Central Bureau of Statistics

14

Israel - Cyprus trade 2003-10 (M$)

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)

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$)

In the past decade the industrial export was mainly
affected by the rapid growth of the Hi-Tech industry

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$)

Main Hi-tech sectors

$TOTAL HIGH- TECH EXPORTS 2010: 25B

Source: CBS & IEICI Calculations excluding R&D

Israels Free Trade Agreements

QIZ Agreement
Egypt

Jordan

1985

USA

1992

EFTA

1997

Turkey

1997

Canada

1999

Mexico

2000

European Union

2007

MERCOSUR*

(Association Agreement)

* 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
Moldova
Poland
Romania
Slovakia
Slovenia

South Africa
Thailand
Turkey
Turkmenistan
Ukraine
Uruguay
Uzbekistan

42

Israel in Global Perspective

Doing Business Index (World Bank)/183

Israel in Global Perspective

The Enabling Trade Index- WEF/125

Israel in Global Perspective

The Global Competitiveness Index- WEF/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