Economic Trends/Outlook in Israel
While enduring the effects of the global economic crisis, Israel has experienced in 2009 an economic slowdown phase, without having to go into recession due to a cautious monetary and fiscal policy. The growth rate, which was revived in 2010, is estimated to be 4.2% and it is led by three different drivers: a dynamic private consumption, a high level of investment in companies and in R&D, and an increase in exports. The growth should slow down in 2011 due to the presumed weakness of the economies of Israel's main trade partners which are the United States and the European Union.
The priority of Israel is to maintain growth and control inflation on the context of the currency appreciation (Shekel) and the rise in real estate prices. The government has established a pro-active policy in order to reduce the public debt and inflation. Measures have been taken to reduce VAT and taxes in order to maintain domestic consumption.
Israel enjoys one of the highest standards of living in the area and the average salary is at a close level to the European average. However, 25% of Israelis live in poverty and inequalities are strong. The unemployment rate experienced a rise with the global crisis, surpassing 7%, but it has decreased to around 6% in 2010.
|GDP (billions USD)||195.39||213.15e||234.91e||248.99e||262.03e|
|GDP (Constant Prices, Annual % Change)||0.8||4.6e||3.8e||3.8e||3.7e|
|GDP per Capita (USD)||26,874||28,686e||30,934e||32,082e||33,036e|
|General Government Balance (in % of GDP)||-5.1e||-4.2e||-3.5e||-2.8e||-2.3e|
|General Government Gross Debt (in % of GDP)||80.4e||77.9e||73.0e||70.0e||67.5e|
|Inflation Rate (%)||3.3||2.7e||3.0e||2.5e||2.4e|
|Unemployment Rate (% of the Labor Force)||7.6||6.7e||5.5e||5.0e||6.8e|
|Current Account (billions USD)||7.19e||7.73e||7.79e||7.75e||-|
|Current Account (in % of GDP)||3.7e||3.9e||3.7e||3.5e||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
Israel has a diversified and technologically advanced economy. The agricultural sector employs 2% of the population and the country's main crops are fruits and vegetables, cereals, wine and cattle farming. The country is self-sufficient in food production, with the exception of cereals.
The fields of excellence of the Israeli industry are chemical products (Israel specializes in generic medicines), plastics engineering and high technologies. The companies, particularly those of the state-of-the-art technology, have profited from the collection of funds arriving from Wall Street and other financial centers of the world. As a fact, Israel classifies second, after Canada, for the number of companies registered in the American stock market. The state-of-the-art technologies (aeronautics, electronics, telecommunications, software, bio-technologies) represent about 40% of GDP. The other important activity sectors in Israel are diamond cutting, textile and tourism. This last one is always significant despite the Israeli-Palestian conflict.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||1.6||21.9||75.6|
|Value Added (in % of GDP)||-||-||-|
|Value Added (Annual % Change)||-||-||-|
Source: World Bank - Last Available Data.
Indicator of Economic Freedom
- Moderately free
- World Rank:
- Regional Rank:
Sources of General Economic Information
Ministry of Agriculture and Rural Development
Ministry of Foreign Affairs
Ministry of Industry and Trade
Ministry of Communications
Ministry of Construction and Housing
Ministry of Finance
Ministry of Tourism
- Statistical Office
Central Bureau of Statistics
- Central Bank
Bank of Israel
- Stock Exchange
Tel-Aviv Stock Exchange
- Other Useful Resources
Economic information from the Ministry of External Affairs
- Main Online Newspapers
- Economic Portals
Port2Port, Israeli Trade Portal
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