Transcript Israel Ministry of Finance - Economic Highlights Presentation

STATE OF ISRAEL
MINISTRY OF FINANCE
International Affairs Department
ECONOMIC HIGHLIGHTS
July 2011, 2nd Quarter 2011
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Contents
Economic Figures
Balances
International Comparisons
Israel and the OECD
Note:
International Agreements
Relevant Sites
Contact Us
You can return to the beginning
of each chapter by clicking the
emblem of Israel on the top of
each slide.
Economic Figures
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
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Main Economic Indicators
2009
2010
2010
Q2
2010
Q3
2010
Q4
2011
Q1
GDP
(current prices in $B)*
203.6
213.1
52.9
53.5
54.5
55.1
Real GDP Growth Rate
(%)
0.8%
4.7%
5.5%
4.8%
7.6%
4.7%
--
--
--
--
Criteria
GDP per Capita
(PPP adjusted)*
28,581$
GDP per Capita Growth Rate
(%, 2005 prices)
29,531$
-1.1%
2.8%
3.7%
2.8%
5.4%
2.7%
Exports (Goods & Services) $B*
(As Percentage of GDP)
80.4
(39.5%)
91.3
(42.9%)
23.0
(43.5%)
23.1
(43.1%)
23.7
(43.5%)
24.6
(44.6%)
Imports (Goods & Services) $B*
(As Percentage of GDP)
76.0
(37.3%)
85.6
(40.1%)
21.3
(40.2%)
21.3
(39.7%)
21.1
(40.5%)
22.9
(41.5%)
7.6%
6.6%
6.5%
6.5%
6.5%
6.0%
Unemployment Rate
(%)
*Current Prices, using a public exchange rate of 1$ = 3.46 NIS
** Estimated
Source: Ministry of Finance, IMF
CONTINUE
Main Economic Indicators
Criteria
Total Gross Debt
(% of GDP)
Government Expenditure
(Percentage of GDP)
Current Account Surplus
(% of GDP)
Inflation Rate
(CPI, yearly average)
2007
2008
2009
2010
77.8%
77.1%
79.3%
76.4%
43.6%
43.0%
43.0%
42.7%
2.9%
0.8%
3.6%
2.9%
0.5%
4.6%
3.3%
2.7%
CONTINUE
Source: Ministry of Finance
Main Economic Indicators
Domestic Bonds
Rating Firm
Term
Overseas Bonds
Forecast
Rating
Moody's
Standard & Poor's
Fitch
Long
Rating
A1
A1
Stable
Short
-
Long
AA-
P1
A
Stable
Short
A-1+
Long
A+
A-1
A
Stable
Short
-
F1
All 3 rating firms have reaffirmed Israel’s rating, without any downgrade,
Since the global economic crisis in 2009.
CONTINUE
Source: Ministry of Finance
GDP and Business GDP
Annual rate of change, constant prices
10%
9%
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
8.7%
growth rates
8%
7.6%
7.0%
6.7%
7%
6.0%
5.7%
5.8%
5.4%
6%
5.4%
4.8%
4.7%
5%
5.5%
5.1%
4.7%
4.6%
4.2%
4%
3%
2%
0.8%
1%
0.2%
0%
2006
2007
2008
2009
2010
2010 Q2
2010 Q3
2010 Q4
2011 Q1
-1%
-2%
GDP
Business GDP
CONTINUE
Source: Ministry of Finance.
GDP Growth
Israel compared to advanced economies*
(annual rate of change, constant prices)
5.7%
5.6%
5.4%
5.0%
4.9%
4.7%
4.6%
3.6%
4.2%
3.1%
3.0%
2.7%
2.7%
2.7%
2.6%
1.6%
0.8%
0.5%
-0.5%
-1.5%
-2.5%
-3.5%
0.2%
2004
2005
2006
2007
2008
2009
2010
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
Advanced Economies
Israel Growth
-3.4%
CONTINUE
Source: Ministry of Finance, IMF
Major GDP Components
Annual rate of change, in constant prices
20.0%
Global Economic Crisis
14.6%
15.0%
13.6%
13.6%
12.6%
9.3%
10.0%
5.9%
5.0%
6.3%
5.9%
4.3%
4.1%
3.1%
3.1%
3.0%
2.1%
1.4%
2.2%
1.4%
2.2%
0.0%
2006
2007
2008
2009
2010
-5.0%
-10.0%
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.
-5.8%
-12.5%
-15.0%
Private Consumption
Government Consumption
Investment in Fixed Assets
Exports of Goods and Services
CONTINUE
Source: Ministry of Finance
Exports of Goods and Services
US $ Billions, current prices
Global
90.0
Economic
80.0
70.0
Crisis
Services
24.1
Goods
24.7
21.1
60.0
22.0
19.3
50.0
17.4
16.0
40.0
13.4
57.2
30.0
50.3
20.0
36.7
39.8
2004
2005
45.9
55.7
2009
2010
43.3
30.2
10.0
0.0
2003
2006
2007
2008
CONTINUE
Source: Ministry of Finance
Israel’s Main Trading Partners
2010, US $ Billions
7
20
Imports
6
Exports
18
5
16
14
4
6.7
12
6.1
3
10
18.5
2
3.7
3.2
8
2.4
1
6
2.2
2.1
1.8
1.8
1.8
0
4
6.0
2
3.1
2.9
2.3
1.8
1.7
1.3
1.3
1.3
0
*Since July 1997 the data on trade with Hong-Kong is added to the data on China
Source: Central Bureau of Statistics
CONTINUE
Israel’s Main Trading Partners
US $ Billions
30
29.7
25
Europe
Asia
26.8
26.4
22.9
20
North America
15
10
Exports
5
30
13.7
11.9
8.7
8.3
13.3
10.0
6.3
7.3
0
25
19.9
20
21.2
21.9
19.6
Imports
17.6
19.2
18.9
15
15.4
13.8
12.2
10
9.8
9.5
5
0
CONTINUE
Source: Central Bureau of Statistics
Net Foreign Investments in Israel
US $ Billion
25
Direct Investments
Total Investments
19.4
20
17.6
15.3
14.4
15
Global Economic
Crisis
10.9
10.7
10.7
9.5
10
8.8
8.3
5.2
4.9
5
4.3
4.4
4.3
3.3
2.4
1.6
0
2002
2003
2004
2005
2006*
* 2006 is exceptional due to a large acquisition by Teva Pharmaceutical Industries Ltd
Source: Ministry of Finance
2007
2008
2009
2010
CONTINUE
Unemployment and Participation
As % of total labor force
8.0%
7.9%
58.5%
7.6%
58.0%
57.7%
7.5%
57.7%
57.4%
7.2%
56.8%
7.0%
56.8%
6.5%
57.5%
6.9%
56.7%
57.0%
57.1%
6.6%
6.5%
56.8%
56.5%
6.5%
56.0%
6.0%
Since the 2nd quarter of 2009 unemployment is decreasing,
6.0%
55.5%
hand in hand with an increase in participation rate since the 1st quarter of 2010.
5.5%
Unemployment Rate
55.0%
Participation in the Labor Force
5.0%
54.5%
Q2
Q3
Q4
2010 Q1
Q2
Q3
Q4
2011 Q1
CONTINUE
Source: Ministry of Finance
Inflation Rate
Rate of change in CPI, yearly average, 2008=100
5%
4.6%
4%
3.3%
3%
2.7%
2.1%
2%
1.4%
1%
0.7%
0.5%
0%
2003
2004
2005
2006
2007
2008
2009
2010
-0.4%
-1%
CONTINUE
Source: Central Bureau of Statistics, Ministry of Finance
Inflation Rate
Rate of change in CPI, 12 months average, 2008=100
104
103.1
103
102.3
101.8
102
100.8
101
101.3
101.4
Oct 2010
Nov 2010
102.5
102.0
101.0
100.3
99.8
100
99.5
99
98
97
May 2010
Jun 2010
Jul 2010
Aug 2010
Sep 2010
Dec 2010
Jan 2011
Feb 2011
Mar 2011
Apr 2011
CONTINUE
Source: Central Bureau of Statistics, Ministry of Finance
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
3.3%
3%
2.7%
2.2%
2.4%
2.3%
1.6%
1.4%
1.6% 1.7%
1.2%
1%
0.7%
-1%
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US
A
No
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Po
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0.0%
Be
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-0.3%
-0.5%
Sw
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Ja
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-0.7%
-0.9%
-1.4%
-1.7% -1.6%
2009 (left column)
-3%
2010 (right column)
CONTINUE
Sources: Ministry of Finance, IMF
Growth of Main GDP Components
for Previous Quarter
Criteria
Q1 2011
Real GDP
+ 4.7%
Business GDP
+ 5.8%
Exports
+ 16.0%
Private Consumption
+ 6.8%
Public Consumption
+ -5.7%
Investment in Fixed Assets
+ 23.7 %
NEXT CHAPTER: BALANCES
Source: Ministry of Finance
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Balances
Gross Public Debt
Budget Deficit – Target and Execution
Budget Deficit and General Government Expenditure
Current Account and Net Foreign Debt
Gross Tax Burden
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Gross Public Debt
As % 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
105%
99.1%
100%
97.4%
93.8%
95%
90%
Global
Economic
84.3%
Crisis
85%
79.3%
77.8%
80%
77.1%
76.4%
75%
2003
2004
2005
2006
2007
2008
2009
2010
CONTINUE
Source: Ministry of Finance
Budget Deficit – Target and Execution
in NIS million, current prices
2009 Q2
2009 Q3
2009 Q4
2009 Total
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2010 Total
2011 Q1
-500
-1980
-3433
-5500
-3579
-4,452
-6523
-10500
-15500
-13,501
-15396
-16,061
For the first time in its history,
Israel enacted a biennial budget
for the years 2009-2010
-20500
-25500
In both years, Israel came in
under budget target.
-30500
-28931
-35500
-40500
Quarterly Budget Execution
-39,286
Yearly Budget Execution
-45500
Yearly Budget Target
-44,355
-42924
CONTINUE
Source: Ministry of Finance
Budget Deficit and
General Government Expenditure
6%
Budget Deficit
(% of GDP)
5.2%
5%
3.7%
4%
General Government Expenditure
(% of GDP)
3%
2.2%
2%
46%
1.8%
0.9%
1%
45.3%
0.0%
45%
0%
44.7%
44%
43%
43.6%
43.0%
43.0%
42.7%
42%
41%
CONTINUE
Source: Ministry of Finance
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
30%
25%
21.0%
21.1%
2007
2008
24.7%
24.9%
2009
2010
20%
Current Account Surplus
13.7%
15%
(% of GDP)
10.2%
10%
4.2%
5%
5.1%
1.6%
5.0%
0%
2003
4.0%
2004
2005
2006
3.6%
3.1%
2.9%
3.0%
2.90%
2.3%
Net Foreign Surplus*
(% of GDP)
2.0%
1.2%
0.8%
1.0%
0.0%
2003
2004
2005
2006
2007
2008
*Current Prices, using a public exchange rate of 1$ = 3.46 NIS
Source: Ministry of Finance.
2009
2010
CONTINUE
Gross Tax Burden
as % of GDP
38%
36%
35.4%
35.5%
35.9%
34%
36.3%
33.8%
32.5%
32%
31.4%
30%
28%
OECD countries average: 34.8% (2008 average)
NEXT CHAPTER: INTERNATIONAL COMPARISONS
Source: Ministry of Finance, OECD
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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)
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IMD World Competitiveness
Yearbook 2011
The Institute for Management
Development ranked Israel
17th
out of 59 countries for 2011
(Israel was also ranked 17th in 2010)
CONTINUE
Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2011
IMD World Competitiveness
Yearbook 2011
Information Technology Skills
Central Bank policy
Flexible and adaptability
Entrepreneurship
CONTINUE
Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2011
IMD World Competitiveness
Yearbook 2011
Total expenditure on R&D (as % of GDP)
Scientific Research
Venture Capital
Innovative capacity
CONTINUE
Source: International Institute for Management and Development (IMD), World Competitiveness Yearbook 2011
WEF Global Competitiveness
Index 2010-2011
The World Economic Forum
ranked Israel
24th
out of 139 countries
for 2010-2011
CONTINUE
Source: World Economic Forum, Global Competitiveness Index, 2010-2011
WEF Global Competitiveness
Index 2010-2011
Quality of scientific research institutions
Utility patents per million population
Strength of investor protection
Availability of latest technologies
CONTINUE
Source: World Economic Forum, Global Competitiveness Index, 2010-2011
WEF Global Competitiveness
Index 2009-2010
Legal rights index
Capacity for innovation
Nature of competitive advantage
Firm-level technology absorption
CONTINUE
Source: World Economic Forum, Global Competitiveness Index, 2010-2011
Central Bank Interest Rates:
Israel and U.S.A
3.5%
3.25%
The Bank of Israel was the first in the western world to
raise interest since the outburst of the economic crisis.
3.0%
3.00%
The rate was raised gradually from 0.5% to 3.25%
2.5%
2.50%
2.0%
2.00%
1.75%
1.5%
1.50%
1.25%
1.0%
1.00%
0.75%
0.5%
0.50%
Bank of Israel Rate (BOI)
U.S. Federal Funds Rate (FED) = 0%
0.0%
CONTINUE
Source: Bank of Israel (BOI), Federal Reserve
NASDAQ & Tel Aviv 100
monthly average
4,000.00
1300.00
Tel Aviv 100 corresponds with the
NASDAQ to current events
1200.00
3,500.00
1100.00
1000.00
3,000.00
900.00
2,500.00
800.00
700.00
2,000.00
600.00
500.00
1,500.00
Nasdaq (left scale)
Tel Aviv 100 (right scale)
400.00
300.00
Ja
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10
11
20 1 2
07
2
3
4
5
6
7
8
9
10
1
Ja
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20 2
08
2
3
4
5
6
7
8
9
10
1
Ja
n 11
20 2
09
2
3
4
5
6
7
8
9
10
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Ja
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20 2
10
2
3
4
5
6
7
8
9
10
11
Ja
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20 2
11
2
3
4
5
6
1,000.00
NEXT CHAPTER: ISRAEL AND THE OECD
Source: Ministry of Finance
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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
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Expenditure on R&D
As % of GDP, 2008, or latest available year
5%
Israel is ranked
1st of all OECD countries by expenditure on R&D (research & development)
4.27%
4%
4%
as a percentage of GDP (4.27 %), demonstrating innovation, development and creativity.
3%
3%
2.28%
2%
2%
1%
1%
0%
CONTINUE
Source: OECD
Real GDP Growth
3-year average at end of period
12%
10%
Israel’s 3-year average growth rate is higher then most OECD members.
For Israel’s year-on-year graph, see slide no.7
8%
6%
4.83%
4%
2.13%
2%
0%
CONTINUE
Source: OECD
GDP per capita
Current prices and PPP’s, 2009
90,000
80,000
70,000
60,000
Although no comparable data for 2010 exists, 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
50,000
40,000
30,000
33,082
27,661
20,000
10,000
0
CONTINUE
Source: OECD
Unemployment Rate
Average 2006-2008, or latest available period
12
10
8
Israel’s unemployment rate is in an ongoing downtrend, reaching an historic low
level of 5.8% in April 2011. During the last global economic crisis, Israel
experienced a relatively mild increase in unemployment rates.
For Israel’s unemployment, see slide no.14
6
7.27
6.00
4
2
0
NEXT CHAPTER: INTERNATIONAL AGREEMENTS
Source: Ministry of Finance, OECD
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International Agreements
Israel’s Free Trade Agreements
Avoidance of Double Taxation Agreements
Cooperation in Industrial R&D Agreements
Bilateral Investment Treaties
International Organization Memberships
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Israel’s Free Trade Agreements
1985
USA
1992
EFTA
1997
Turkey
1997
Canada
QIZ Agreements
Egypt
(2004)
Jordan
(1998)
1999
Mexico
2000
European Union (Association Agreement)
2007
MERCOSUR (Argentina not yet in force)
CONTINUE
Source: Ministry of Finance
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
Source: Ministry of Finance
Avoidance of Double
Taxation Agreements
Luxembourg
Russia
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
Source: Ministry of Finance
CONTINUE
Cooperation in Industrial R&D
Agreements
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
CONTINUE
Source: Ministry of Finance
Bilateral Investment Treaties
Albania
Cyprus
Hungary*
Argentina
Czech Republic
India
Armenia
El Salvador
Kazakhstan
Azerbaijan
Estonia
Korea
Belarus
Ethiopia
Latvia
Bulgaria
Georgia
Lithuania
China
Germany
Macedonia*
Croatia*
Guatemala
Moldova
CONTINUE
* See comments in the Bilateral Investments Treaties page in our website
Source: Ministry of Finance
Bilateral Investment Treaties
Mongolia
South Africa*
Montenegro
Thailand
Peru*
Turkey
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
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
Source: Ministry of Finance
BACK TO CONTENTS
Relevant Sites
Ministry of Finance
Bank of Israel
Central Bureau of Statistics
Israeli Government Portal
Israel Securities Authority
Ministry of Industry, Trade and Labor
Ministry of Foreign Affairs
CONTACT US
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