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STATE OF ISRAEL MINISTRY OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT

STATE OF ISRAEL MINISTRY OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT. ECONOMIC HIGHLIGHTS 3rd Quarter 2009. Note: You can return to the beginning of each chapter by clicking the emblem of Israel on the top of each slide. Contents. Economic Figures. Balances. International Comparisons.

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STATE OF ISRAEL MINISTRY OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT

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  1. STATE OF ISRAELMINISTRY OF FINANCEINTERNATIONAL AFFAIRS DEPARTMENT ECONOMIC HIGHLIGHTS 3rd Quarter 2009

  2. Note: You can return to the beginning of each chapter by clicking the emblem of Israel on the top of each slide. Contents • Economic Figures • Balances • International Comparisons • Israel and the OECD • International Treaties • Relevant Sites • Contact Us

  3. EconomicFigures Main Economic Indicators GDP and Business GDP Growth: Israel compared to the World Major GDP Components Exports of Goods and Services Main Trading Partners Foreign Investments Unemployment & Participation Rates Inflation Rate Inflation Rate Worldwide Growth of Main GDP Components 2008 BACK TO CONTENTS

  4. Main Economic Indicators *Using public exchange rate. ** In current prices CONTINUE

  5. Main Economic Indicators CONTINUE Source: Ministry of Finance

  6. Moody's / S&P & Fitch Aa3/AA- A1/A+ A2/A A3/A- Baa1/BBB+ Baa2/BBB Baa3/BBB- Main Economic Indicators CONTINUE Source: Ministry of Finance

  7. GDP and Business GDP(Annual rate of change (%), in Constant Prices) Despite the current economic crisis, 2009 Q2 shows signs of recovery. In the past few years, Israel’s economy has enjoyed high growth rates. CONTINUE Source: Ministry of Finance.

  8. GDP GrowthIsrael compared to Advanced Economies* (Annual rate of change (%), in constant prices) Since 2004, Israel’s growth rate has exceeded the average growth rate of advanced economies. CONTINUE * Weighted average: US – 39%, Euro area – 46.5%, Japan – 3%, UK – 5%, Asian Newly Industrialized countries – 6.5% Source: Ministry of Finance.

  9. Major GDP Components(Annual rate of change (%), in constant prices) CONTINUE Source: Ministry of Finance

  10. Exports of Goods and Services ($B) CONTINUE Source: Ministry of Finance

  11. EXPORT IMPORT Israel’s Main Trading Partners(US$ Billions, excluding diamonds) China is becoming a leading trade partner for Israel 2008 2007 CONTINUE Source: Central Bureau of Statistics

  12. Net Foreign Investments in Israel (B$) CONTINUE Source: Ministry of Finance

  13. Unemployment and Participation (As % of Total Labor Force) August 2009 shows signs of decrease in unemployment for the fist time since May 2008. The 1% downtrend measured will have a positive effect on Q3 unemployment rate, containing the global crisis’s effect on the Israeli economy. CONTINUE Source: Ministry of Finance

  14. Inflation Rate (Rate of Change in CPI, end of year) The Consumer Price Index (CPI) grew by 3.8% during 2008. * CONTINUE * July 2009 index compared to July 2008 Source: Central Bureau of Statistics, Ministry of Finance

  15. Inflation Rate Worldwide (Rate of Change in CPI, end of 2008) Inflationary pressures in Israel have decreased, as a result of the world crisis. 3.8% CONTINUE Sources: Central Bureau of Statistics, OECD

  16. Growth of Main GDP Components 2008 NEXT CHAPTER: BALANCES BACK TO CONTENTS Source: Ministry of Finance

  17. Balances Gross Public Debt Budget Deficit and General Government Expenditure Current Account and Net Foreign Debt Gross Tax Burden BACK TO CONTENTS

  18. Gross Public Debt (as percentage of GDP) Since 2003, the gross public debt has been on a downward trend. CONTINUE Source: Ministry of Finance

  19. Budget Deficit and General Government Expenditure General Government Expenditure (% of GDP) Budget Deficit CONTINUE Source: Ministry of Finance

  20. Current Account Balance and Net Foreign Debt In 2003, current account turned positive, conversely with the decrease of the net foreign debt. Net Foreign Debt (% of GDP) Current Account Surplus (% of GDP) CONTINUE * As percentage of 2007 GDP Source: Ministry of Finance.

  21. Gross Tax Burden (as % of GDP) Tax burden has been in the vicinity of OECD average since 2003 OECD countries average: 26.4% (as of 2008) NEXT CHAPTER: INTERNATIONAL COMPARISONS BACK TO CONTENTS Source: Ministry of Finance, OECD

  22. International Comparisons Central Bank Interest Rates: Israel and U.S.A NASDAQ and Tel-Aviv 100 (monthly average) Global Competitive Index BACK TO CONTENTS

  23. Central Bank Interest Rates: Israel and U.S.A The Bank of Israel announced that the interest rate for September 2009 will increase by 0.25% to a level of 0.75%, being the first in the western world to raise interest since the economic crisis. Bank of Israel Rate (BOI) U.S. Federal Funds Rate CONTINUE Source: Bank of Israel (BOI), Federal Reserve

  24. NASDAQ & Tel Aviv 100 (monthly average) Tel Aviv 100 corresponds with the NASDAQ to current events CONTINUE Source: Tel Aviv Stock Exchange (TASE) , World Federation of Exchanges (WFE)

  25. Global Competitiveness Index 2008-2009 The World Economic Forum Ranked Israel23rdOut of 134 Countries CONTINUE Source: World Economic Forum, Global Competitiveness Index, 2008-9

  26. Global Competitiveness Index 2008/9(selected categories) Venture Capital Availability Availability of Scientists & Engineers Quality of Scientific Research Institutions Company Spending on R&D CONTINUE Source: World Economic Forum, Global Competitiveness Index, 2008-9

  27. Global Competitiveness Index 2008/9(selected categories) Strength of Investor Protection Availability of Latest Technologies Utility Patents Legal Rights Index CONTINUE Source: World Economic Forum; Global Competitiveness Index, 2008-9

  28. Global Competitiveness Index 2008/9(selected categories) The Networked Readiness Index 2008–2009 1 3 6 13 18 25 29 31 39 46 54 Countries that have been invited for open discussions for joining the OECD *GCI:Provides a holistic overview of factors critical to productivity and competitiveness *NRI: Measures the level of ICT (Information and Communication Technologies) development of nations 59 69 74 NEXT CHAPTER: ISRAEL AND THE OECD BACK TO CONTENTS Source: World Economic Forum; Global Competitiveness Index (GCI) 2008-2009, Global Information Technology Report 2008-2009

  29. Israel and the OECD Real GDP Growth Unemployment Rate in 2007-2008 GDP Based on PPP per Capita in 2006 BACK TO CONTENTS

  30. 2007: 5.3% 2008: 4.0% 07’ 08’ Real GDP Growth(Annual percentage of change, partial list) As many OECD countries were highly influenced by the recession in 2008, Israel only experienced a relatively mild decay in growth rate. CONTINUE Source: Ministry of Finance, IMF

  31. Unemployment Rate(harmonized) 08’ 07’ 08’07’ 08’ 07’ 08’ 07’ CONTINUE Source: OECD, Ministry of Finance

  32. GDP per capita based on purchasing-power-parity (PPP) 2007, (in US$) 32,752 26,314 NEXT CHAPTER: INTERNATIONAL TREATIES BACK TO CONTENTS Source: OECD

  33. International treaties Israel’s Free Trade Agreements Avoidance of Double Taxation Agreements Cooperation in Industrial R&D Agreements Protection of Investments Agreements International Organization Memberships BACK TO CONTENTS

  34. Israel’s Free Trade Agreements 1985 USA QIZ Agreements Egypt Jordan 1992 EFTA 1997 Turkey 1997 Canada 1999 Mexico 2000 European Union (association agreement) 2007 MERCOSUR (Member states of the common market of the south, not yet in force) CONTINUE

  35. Avoidance of Double Taxation Agreements Austria Croatia Hungary Belarus Denmark India Belgium Estonia * Ireland Brazil Ethiopia Italy Bulgaria Finland Jamaica Canada France Japan China Germany Latvia Czech Republic Greece Lithuania CONTINUE * The agreement with Estonia has only been signed initially

  36. Avoidance of Double Taxation Agreements Luxembourg Russia Switzerland Mexico Singapore Thailand Moldova Slovakia Netherlands Norway Slovenia Turkey Philippines South Africa ** Ukraine Portugal * South Korea United kingdom Poland Spain Uzbekistan Romania Sweden U.S.A * The agreement with Portugal has been recently ratified ** Not yet ratified by South Africa. CONTINUE

  37. Cooperation in Industrial R&D Agreements Austria India Sweden Belgium Ireland United kingdom Canada Italy U.S.A China Korea Finland Netherlands France Portugal Germany Singapore Hong Kong Spain CONTINUE

  38. Protection of Investment Agreements Austria Albania Cyprus Belgium Argentina Czech republic Canada Armenia El Salvador China Azerbaijan Estonia Finland Belarus Georgia France Bulgaria Germany Germany China Guatemala Hong Kong Croatia India CONTINUE

  39. Protection of Investment Agreements Kazakhstan Slovenia Korea South Africa * Latvia Thailand Lithuania Turkey Moldova Turkmenistan Poland Ukraine Romania Uruguay Slovakia Uzbekistan CONTINUE *appending ratification

  40. Main International Economic Organizations Membership: • Israel is a member in leading international • economic organizations: • WBG • IMF • WTO • OECD (candidate) A more detailed list: BIS | BSEC (observer) | CE (observer) | CERN (observer) | EBRD | FAO | IADB | IAEA | WBG – IBRD, IFC, IDA, MIGA | ICAO | ICC | ICCT (signatory) | ICFTU | IFAD | IFRCS (observer) | ILO | IMF | IMO | Interpol | IOC | IOM | ISO | ITU | OAS (observer) | OECD (candidate) | OPCW (signatory) OSCE (partner) | PCA | UN | UNCTAD | UNECE | UNEP | UNESCO | UNHCR | UNIDO | UPU | WCO | WFP | WHO | WIPO | WMO | WTOO | WTRO | WTO | ICSID NEXT CHAPTER: RELEVANT SITES BACK TO CONTENTS

  41. Relevant Sites Ministry of Finance International Affairs Website www.financeisrael.mof.gov.il Israeli Government Institutions Ministry of Finance OECD Profile on Israel Bank of Israel (BOI) Central Bureau of Statistics Israeli Government Portal Israel Securities Authority Ministry of Industry, Trade and Labor CONTACT US BACK TO CONTENTS

  42. WE WELCOME YOUR FEEDBACK Mr. Roni Hershkovitz Acting Director Overseas Economic Information International Affairs Department Ministry of Finance Jerusalem Israel VISIT OUR WEBSITE: www.financeisrael.mof.gov.il CONTACT US: financeisrael@mof.gov.il Mr. Assaf Luxembourg International Affairs Department Ministry of Finance Jerusalem Israel START OVER

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