FITA helps you find
service providers for:

Market Research


flag Israel Israel: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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. 

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 194.87217.45e245.27e258.40270.76
GDP (Constant Prices, Annual % Change) 0.84.84.83.63.7
GDP per Capita (USD) 26,80229,26432,298e33,29434,136
General Government Balance (in % of GDP) -5.0-3.9e-3.1e-2.4-1.8
General Government Gross Debt (in % of GDP) 80.777.4e71.1e68.966.8
Inflation Rate (%) 3.32.73.4e1.62.0
Unemployment Rate (% of the Labor Force) 7.66.75.95.85.8
Current Account (billions USD) 7.066.390.731.722.70
Current Account (in % of GDP) 3.62.90.31.0-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

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) 1.7 20.4 77.0
Value Added (in % of GDP) - - -
Value Added (Annual % Change) - - -

Source: World Bank - Last Available Data.

 
 
Monetary Indicators 20062007200820092010
Israeli New Sheqel. (ILS) - Average Annual Exchange Rate For 1 USD 4.464.113.593.933.74

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about Israel on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
68.5/100
Position:
Moderately free
World Rank:
41/179
Regional Rank:
5/17

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

Return to top

Foreign Trade in Figures

The Israeli economy is extremely open. Israel's exports represent around 24% of the GNP. They are the backbone of the country's growth.

In 2009, Israel's trade balance, which was previously in deficit, recorded a historical surplus due to a strong drop on imports.  The situation was again reversed in 2010, a trend that should continue in 2011. 

The main customers and suppliers of Israel are the European Union, the United States, Turkey, Japan, India and China. The main goods imported by the Israeli state are raw materials and half-finished products, hydrocarbons, consumption goods (food products and drinks, electrical equipment, transport equipment, etc.) and investment products. The main national exports are manufactured goods which are often high technology products (computer equipment, electronic components, aeronautics, electronic communication equipment, verification products and pharmaceutical products).

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 50,33459,03967,65649,27861,250
Exports of Goods (million USD) 46,78954,09161,33747,93558,432
Imports of Services (million USD) 14,42417,32219,62916,86517,440
Exports of Services (million USD) 19,18421,11524,28421,96124,333
Imports of Goods and Services (Annual % Change) 3.311.92.5-14.112.5
Exports of Goods and Services (Annual % Change) 6.09.35.9-12.513.4
Imports of Goods and Services (in % of GDP) 42.344.041.632.234.9
Exports of Goods and Services (in % of GDP) 42.842.740.034.737.0
Trade Balance (million USD) -3,836-5,684-7,238-96-2,365
Trade Balance (Including Service) (million USD) 733-2,115-2,8414,7484,283
Foreign Trade (in % of GDP) 85.186.781.566.971.9

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
United States 31.7%
Hong Kong 6.7%
Belgium 5.3%
India 4.9%
United Kingdom 3.9%
See More Countries 47.5%
Main Suppliers
(% of Imports)
2010
United States 11.3%
China 8.0%
Germany 6.2%
Belgium 6.0%
Switzerland 5.4%
See More Countries 63.0%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 28.1%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 9.1%
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 4.0%
Prepared binders for foundry moulds or cores;...Prepared binders for foundry moulds or cores; chemical products and preparations for the chemical or allied industries, incl. mixtures of natural products, n.e.s. 4.0%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 3.7%
See More Products 51.1%
Main Imports
(% of Imports)
2010
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 14.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 11.3%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 5.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 3.3%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 2.2%
See More Products 63.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

Return to top

Sources of General Economic Information

Ministries
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
Search Engines
Dapey Reshet
Tapuz
Walla
Economic Portals
Port2Port, Israeli Trade Portal

Return to top

Political Outline

Executive Power
The President is Head of the State and he is elected by the Parliament of the country for a seven year term. His role is essentially ceremonial. The President chooses the leader of the party or majority coalition in the parliament to exercise the functions of the Prime Minister, for a four year term. The Prime Minister is head of the government and it is he who holds the executive power, namely the execution of the law and management of current affaire of the country. The Cabinet is chosen by the Prime Minister before being approved by the Parliament.
Legislative Power
The legislative power is Israel is unicameral. The parliament consists of 120 members, elected by universal suffrage universal for a four year term. The parliament can decide to be dissolved by a simple majority, during a censure motion. The Prime Minister cannot directly dissolve the parliament, he cannot veto it. The Israeli citizens have considerable political rights.
Main Political Parties
The Israeli political system is based on proportional representation, which allows having a system with several parties. No one is in a position to solely assume power,which forces them to cooperate to form coalition governments. The main political parties of the country are :
- Kadima : centrist party, which advocates fixing the borders with the future Palestinian State;
- The Workers Party (Havoda) : left center zionist political party;
- Le Likoud : right nationalist party which draws its roots from the Zionist movement
- Shas : advocates ultra-orthodox Judaism.
Current Political Leaders
President: Shimon PERES (since July 2007)
Prime Minister: Binjamin NETANYAHU (since March 2009) as head of the coalition government
Next Election Dates
Presidential: 2014 ; legislative : 2013.
 

Indicator of Freedom of the Press

World Rank:
86/178
Evolution:
7 places up compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
2/7

Map of freedom 2010
Source: Freedom House

 

Return to top

Any Comments About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Last Updates: January 2012