Economic Highlights Presentation 2 nd Quarter 2012 STATE OF ISRAEL MINISTRY OF FINANCE International...

Economic Highlights Presentation2nd Quarter 2012

STATE OF ISRAELMINISTRY OF FINANCEInternational Affairs Department

In any case of information derived from sources external to the Ministry of Finance, such sources are mentioned at the bottom of each item

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Table of Contents

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Balances

International Comparisons

Main Economic Indicators

Israel in the OECD

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International Agreements

Table of Contents


GDP and Business GDP

Major GDP Components

Exports of Goods and Services

Foreign Investments

Unemployment and Participation

Consumer Price Index

Inflation Rate

Economic Figures

Main Trading Partners

Israel’s Credit Ratings

Gross Domestic Capital Formation

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Economic Figures

* Using a public exchange rate of 1USD=3.6NIS (2011 average) ** Estimated

Criteria201020112011 Q22011 Q32011 Q42012 Q1

GDP(constant prices, 2005, in $B)*

204.6214.2 53.453.954.354.7

Real GDP growth rate(% change)

4.8%4.7%3.7%3.3%3.2%2.9%

GDP per capita, based on PPP(Current international $)

29,602$**31,005$6,685$6,707$6,725$6,744$

GDP per capita growth rate (%, 2005 prices)

2.9%2.8%2.0%1.4%1.1%1.1%

Exports (goods & services), $B*(As % of GDP)

87.742.9%

91.942.9%

23.644.2%

23.042.7%

22.641.6%

23.9--

Imports (goods & services), $B*(As % of GDP)

82.340.2%

91.042.5%

23.343.6%

22.842.3%

22.541.4%

24.0--

Unemployment rate8.3%7.0%7.0%7.0%6.8%6.7%

Additional Sources: IMF

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Economic Figures

Criteria200620072008200920102011

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%

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GDP and Business GDPAnnual rate of change, constant prices, 2005

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Major GDP ComponentsAnnual rate of change, constant prices, 2005

Global economic crisis

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Exports of Goods and ServicesUS $ Billions, constant prices, 2005

* Using a public exchange rate of 1USD=3.6NIS (2011 average)


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Main Trading PartnersUS $ 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

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Main Trading PartnersUS $ Billions


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Gross Domestic Capital FormationAs % of GDP

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Foreign InvestmentsUS $ Billions

* 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries Ltd.

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Unemployment and ParticipationAs % 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%.

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Consumer Price IndexLast 12 monthly averages, 2010=100


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Inflation RateRate of change in consumer price index, yearly average

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Israel’s Credit Ratings

Rating FirmTermDomestic Bonds

ForecastOverseas Bonds

RatingRating

Moody'sLongA1

StableA1

Short-P1

Standard & Poor's

LongAA-Stable

A+

ShortA-1+A-1

FitchLongA+

StableA

Short-F1

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Balances



Israel in the OECD

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Balances

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Budget Deficit

Current Account Surplus

General Government Expenditure

Net Foreign Surplus

Gross Public Debt

Gross Tax Burden

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Gross Public DebtAs % of GDP


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Budget DeficitAs % of GDP

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Budget DeficitTarget 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 two-year budget on a regular basis

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General Government ExpenditureAs % of GDP

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Current Account SurplusAs % of GDP

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Net Foreign SurplusAs % of GDP

* Using a public exchange rate of 1USD=3.6NIS (2011 average)

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Gross Tax BurdenAs % of GDP

Additional Sources: OECD

OECD countries average: 34.8%(2008 average)

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Balances



Israel in the OECD

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Inflation Rates

Israel on WEF Rankings

Israel on IMD Rankings

Interest Rates: Israel & the U.S.

GDP Growth

Stock Indices: NASDAQ & Tel-Aviv 100

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GDP GrowthIsrael 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.

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Inflation RatesRate of change in consumer price index, yearly average (2011)


The Israeli economy demonstrated high stability compared to other countries throughout the global economic crisis.

The Institute for Management Development

ranked Israel 19th out of 59 countries for

2012.

Israel on IMD RankingsIMD World Competitiveness Yearbook 2012

Additional Sources: IMD World Competitiveness Yearbook 201230

Resilience of the economy Entrepreneurship



Israel’s ranking compared to other IMD countries, Business Efficiency and Infrastructure

Israel’s ranking compared to other IMD countries, Economic Performance and Government Efficiency



Israel on WEF RankingsWorld Economic Forum Global Competitiveness Index 2011-2012

Additional Sources: World Economic Forum Global Competitiveness Index 2011-2012

The World Economic Forum ranked Israel

22nd out of 142 countries for 2011-2012

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Quality of scientific research institutions Venture capital availability

Strength of investor protectionUtility patents per million population



Government procurement of advanced technology products

Capacity for innovation

University-industry collaboration in R&D Firm-level technology absorption



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Interest Rates: Israel & the U.S.*

=0

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%.

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Stock Indices: NASDAQ & Tel-Aviv 100

Tel Aviv 100 corresponds with the NASDAQ to current events, with relatively stable reactions.

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Balances



Israel in the OECD

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Israel in the OECD

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Real GDP Growth

Unemployment

GDP per Capita

Expenditure on R&D

Israel was invited as a full member in the OECD on May 10th, 2010, and officially joined in Sep. 10, 2010.

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Expenditure on R&DAs % 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.

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Real GDP Growth2011, end of period


Israel’s growth rate is higher then most OECD members.

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GDP per CapitaU.S $ Billions , Current prices, PPP, 2011 (or most recent data)


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Unemployment RateFor 2011


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Balances



Israel in the OECD

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Avoidance of Double Taxation

Bilateral Investment Treaties

Cooperation in Industrial R&D

Israel’s Free Trade Agreements

Economic Organizations

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Israel’s Free Trade Agreements

QIZ Agreements1985

1992

1997

1997

1999

2000

2007

USA

EFTA

Turkey

Canada

Mexico

European Union (Association Agreement)

MERCOSUR

2004

1998

Egypt

Jordan

More extended information is available in the Israel Ministry of Finance website

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/EconomicData/InternationalAgreements.aspx

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Austria

Belarus

Belgium

Brazil

Bulgaria

Canada

China

Croatia

Czech Republic

Denmark

Estonia

Ethiopia

Finland

France

Germany

Greece

Hungary

India

Ireland

Italy

Jamaica

Japan

Latvia

Lithuania

Luxembourg

Georgia


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Moldova

Norway

Philippines

Portugal

Poland

Romania

Russia

Singapore

Slovak Republic

Slovenia

South Africa

Spain

Sweden

Switzerland

Thailand

NetherlandsTurkey

Ukraine

UK

Uzbekistan

USA

Taiwan

Vietnam

Mexico

South Korea


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Cooperation in Industrial R&D


North America New YorkMassachusettsMarylandVirginiaWisconsinColoradoIllinoisOregonBIRD (Foundation)Ontario CIIRDF (Foundation)

South America ArgentinaUruguayBrazil

Australia(Victoria)

Europe FranceRussia (Rusano, Skolkovo)ItalyGermanyGreeceCzech RepublicBulgariaLithuania SloveniaDenmarkHungaryTurkeyPortugalFinlandSwedenIreland

* Through EUREKA (40 country Multilateral Initiative)

Asia China( Shanghai, Jiangsu, Most)IndiaTaiwan

SIIRD-Singapore (Foundation)KORIL-RDF-Korea (Foundation)


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Albania

Argentina

Armenia

Azerbaijan

Belarus

Bulgaria

China

Croatia

India

Kazakhstan

Latvia

Lithuania

Germany

Cyprus

Czech Republic

El Salvador

Estonia

Georgia

Guatemala

Ethiopia

Hungary

Korea

Moldova


Mongolia


http://he.wikipedia.org/wiki/%D7%A7%D7%95%D7%91%D7%A5:Flag_of_Mongolia.svg

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South Africa

Thailand

Slovakia

Slovenia

Serbia

Poland

Romania

Montenegro Turkey

Turkmenistan

Ukraine

Uzbekistan

Uruguay


http://he.wikipedia.org/wiki/%D7%A7%D7%95%D7%91%D7%A5:Flag_of_Serbia.svg

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Economic OrganizationsMembership 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


http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/EconomicData/InternationalOrganizations.aspx

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Balances



Israel in the OECD

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Contact


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Visit the Israel Ministry of Finance

English website for more information:

Economic Overview of Israel

Other publications and reports on the Israeli economy

Ministry of Finance publications and reports

About the Ministry

Ministry press releases

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/En/Home.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/En/Home.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/General/overview.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/Publications/Publications.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/Publications/mof.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/General/ministry.aspx

http://www.financeisrael.mof.gov.il/FinanceIsrael/Pages/en/PressReleases/PressReleases.aspx

Learn More

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Bank of Israel

Ministry of Foreign Affairs

Ministry of Industry, Trade and Labor

Israel Central Bureau of Statistics

Israel Government Portal

Click to open:

http://www.bankisrael.gov.il/firsteng.htm

http://www.mfa.gov.il/MFA/Israel+Ministry+of+Foreign+Affairs.htm

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Balances



Israel in the OECD

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Contact

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Mr. Roni HershkovitzMr. Ori Kaufman

Overseas Economic InformationInternational Affairs DepartmentMinistry of FinanceState of Israel

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Economic Highlights Presentation 2 nd Quarter 2012 STATE OF ISRAEL MINISTRY OF FINANCE International...

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