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STATE OF ISRAEL MINISTRY OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT

STATE OF ISRAEL MINISTRY OF FINANCE INTERNATIONAL AFFAIRS DEPARTMENT. ECONOMIC HIGHLIGHTS March 2011, 1 st Quarter 2011 Click to start. 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.

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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 March 2011, 1st Quarter 2011 Click to start

  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 *Current Prices, using a public exchange rate of 1$ = 3.56 NIS ** Estimated CONTINUE Source: Ministry of Finance, IMF

  5. Main Economic Indicators CONTINUE Source: Ministry of Finance

  6. Aa3/AA- A1/A+ A2/A A3/A- Baa1/BBB+ Baa2/BBB Baa3/BBB- Main Economic Indicators All 3 rating firms have reaffirmed Israel’s rating, without any downgrade, during the global economic crisis in 2009. CONTINUE Source: Ministry of Finance

  7. GDP and Business GDPAnnual rate of change (%), in Constant Prices In 2010, Israel has recovered from the global In the 4th quarter of 2010, Israel economic crisis, and is back to previous years’ experienced exceptional growth rates 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. In 2009, as most of the world experienced a decline in GDP, Israel experienced a 0.8% growth in it’s GDP CONTINUE Source: Ministry of Finance

  9. Global Economic Crisis Major GDP Components(Annual rate of change (%), in constant prices) In 2010, Investment in Fixed Assets and Export of Goods and Services recovered sharply, after they were contracted severely in 2009 due to the economic crisis. CONTINUE Source: Ministry of Finance

  10. Global Economic Crisis Exports of Goods and Services ($B)* CONTINUE * In Current Prices Source: Ministry of Finance

  11. 2008 2009 2008 2009 Israel’s Main Trading Partners(US$ Billions) Imports Exports CONTINUE * Since July 1997 the data on trade with Hong-Kong is added to the data on China Source: Central Bureau of Statistics

  12. Israel’s Main Trading Partners(US$ Billions) Exports Imports CONTINUE Source: Central Bureau of Statistics

  13. Global Economic Crisis Net Foreign Investments in Israel (In $ Billion) CONTINUE * 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries Ltd Source: Ministry of Finance

  14. Unemployment and Participation (As % of Total Labor Force) As Israel grows out of the global recession, since the 2nd quarter of 2009 unemployment is decreasing, hand in hand with an increase in participation rate since the 1st quarter of 2010. CONTINUE Source: Ministry of Finance

  15. Inflation Rate (Rate of Change in CPI, yearly average) CONTINUE Source: Central Bureau of Statistics, Ministry of Finance

  16. Inflation Rate Worldwide (Annual rate of change in CPI) The Israeli economy demonstrated a high level of stability compared to other countries throughout the global economic crisis CONTINUE Sources: Ministry of Finance, IMF

  17. Growth of Main GDP Components for Previous Year NEXT CHAPTER: BALANCES BACK TO CONTENTS Source: Ministry of Finance

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

  19. Global Economic Crisis Gross Public Debt (as percentage of GDP) Since 2003, gross public debt has been on a consistent downward trend, only interrupted by the extraordinary circumstances surrounding the 2009 global economic crisis CONTINUE Source: Ministry of Finance

  20. Quarterly Budget Execution Yearly Budget Execution Yearly Budget Target 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. CONTINUE Source: Ministry of Finance

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

  22. Current Account Balance and Net Foreign Debt Since 2003, the current account balance is positive, and is accompanied by a decrease of net foreign debt Current Account Surplus (% of GDP) Net Foreign Surplus* (% of GDP) CONTINUE *Current Prices, using a public exchange rate of 1$ = 3.56 NIS Source: Ministry of Finance.

  23. Gross Tax Burden (as % of GDP) OECD countries average: 34.8% (2008 average) NEXT CHAPTER: INTERNATIONAL COMPARISONS BACK TO CONTENTS Source: Ministry of Finance, OECD

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

  25. IMD World Competitiveness Yearbook 2010 The Institute for Management Development ranked Israel17thout of 58 countries for 2010 (Israel was ranked 24th in 2009) CONTINUE Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2010

  26. Resilience of the economy Central bank policy Financial skills Entrepreneurship IMD World Competitiveness Yearbook 2010 CONTINUE Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2010

  27. Venture capital Total expenditure on R&D Scientific research Skilled labor IMD World Competitiveness Yearbook 2010 CONTINUE Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2010

  28. WEF Global Competitiveness Index 2010-2011 The World Economic Forum ranked Israel24thout of 139 countriesfor 2010-2011 CONTINUE Source: World Economic Forum, Global Competitiveness Index, 2010-2011

  29. Quality of scientific research institutions Utility patents per million population Strength of investor protection Availability of latest technologies WEF Global Competitiveness Index 2010-2011 CONTINUE Source: World Economic Forum, Global Competitiveness Index, 2010-2011

  30. Legal rights index Capacity for innovation Nature of competitive advantage Firm-level technology absorption WEF Global Competitiveness Index 2009-2010 CONTINUE Source: World Economic Forum, Global Competitiveness Index, 2010-2011

  31. Central Bank Interest Rates: Israel and U.S.A 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 3.0% Bank of Israel Rate (BOI) U.S. Federal Funds Rate CONTINUE Source: Bank of Israel (BOI), Federal Reserve

  32. NASDAQ & Tel Aviv 100 (monthly average) Tel Aviv 100 corresponds with the NASDAQ to current events NEXT CHAPTER: ISRAEL AND THE OECD BACK TO CONTENTS Source: Ministry of Finance

  33. Israel and the OECD Israel was invited as a full member in the OECD on May 10th, 2010, and officially joined in September 10th, 2010. Expenditure on R&D Real GDP Growth GDP per Capita Unemployment BACK TO CONTENTS

  34. Expenditure on R&D(as percentage of GDP, 2008) Israel is ranked1st of all OECD countries by expenditure on R&D (research & development) as percentage of GDP (4.864 %), demonstrating innovation, development and creativity. CONTINUE Source: OECD

  35. Real GDP Growth(3-year average at end of period) Israel’s 3-year average growth rate is higher then most OECD members. For Israel’s year-on-year graph, see slide no.7 CONTINUE Source: OECD

  36. GDP per capita (current prices in US$, current PPP’s, 2008) Although no final data of the years 2009-2010 exist, it is reasonable to assume a diminishing gap between Israel and the OECD average For Israel’s adjusted PPP GDP Per Capita, see slide no.4 CONTINUE * Estimated Source: OECD

  37. Unemployment Rate(Average 2006-2008 or latest available period) Israel’s unemployment grew mildly compared with some OECD members during 2009, with the global economic crisis in background. For Israel’s unemployment, see slide no.14 NEXT CHAPTER: INTERNATIONAL TREATIES BACK TO CONTENTS Source: Ministry of Finance, OECD

  38. International treaties Israel’s Free Trade Agreements Avoidance of Double Taxation Agreements Cooperation in Industrial R&D Agreements Bilateral Investment Treaties International Organization Memberships BACK TO CONTENTS

  39. Israel’s Free Trade Agreements 1985 USA QIZ Agreements Egypt (2004) Jordan (1998) 1992 EFTA 1997 Turkey 1997 Canada 1999 Mexico 2000 European Union (Association Agreement) 2007 MERCOSUR (Argentina not yet in force) CONTINUE Source: Ministry of Finance

  40. 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 Avoidance of Double Taxation Agreements CONTINUE Source: Ministry of Finance

  41. Russia Luxembourg Taiwan Mexico Singapore Thailand Moldova Slovakia Vietnam Norway Slovenia Turkey Netherlands South Africa Ukraine Philippines South Korea United kingdom Portugal Spain Uzbekistan Poland Sweden U.S.A Romania Switzerland Avoidance of Double Taxation Agreements CONTINUE Source: Ministry of Finance

  42. Austria India Sweden Belgium Ireland United kingdom Canada Italy U.S.A China Korea Victoria(Australia) Finland Netherlands Czech Republic France Portugal Germany Singapore Hong Kong Spain Cooperation in Industrial R&D Agreements CONTINUE Source: Ministry of Finance

  43. Bilateral Investment Treaties Cyprus Albania Hungary* Argentina Czech Republic India Armenia El Salvador Kazakhstan Azerbaijan Korea Estonia Belarus Ethiopia Latvia Bulgaria Lithuania Georgia China Germany Macedonia* Croatia* Guatemala Moldova CONTINUE * See comments in the Bilateral Investments Treaties page in our website Source: Ministry of Finance

  44. Bilateral Investment Treaties Mongolia South Africa* Montenegro Thailand Turkey Peru* Poland Turkmenistan Romania* Ukraine* Serbia Uzbekistan Slovakia Vietnam* Slovenia* CONTINUE * See comments in the Bilateral Investments Treaties page in our website Source: Ministry of Finance

  45. Main International Economic Organizations Membership: • 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 NEXT CHAPTER: RELEVANT SITES BACK TO CONTENTS Source: Ministry of Finance

  46. Relevant Sites Ministry of Finance Bank of Israel Central Bureau of Statistics Israeli Government Portal Israel Securities Authority Ministry of Industry, Trade and Labor CONTACT US BACK TO CONTENTS

  47. Follow us on Twitter Like us on Facebook Subscribe to our RSS Feeds Subscribe to our Newsletters Write us an Email Visit our Website WE WELCOME YOUR FEEDBACK Mr. Roni Hershkovitz Director Overseas Economic Information International Affairs Department Ministry of Finance Jerusalem Israel Mr. Assaf Luxembourg Overseas Economic Information International Affairs Department Ministry of Finance Jerusalem Israel START OVER

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