Israel Economy Profile 2009

Economy - overview

Israel has a technologically advanced market economy with substantial, though diminishing, government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel imports substantial quantities of grain but is largely self-sufficient in other agricultural products. Cut diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts sizable trade deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, its major source of economic and military aid. Israel's GDP, after contracting slightly in 2001 and 2002 due to the Palestinian conflict and troubles in the high-technology sector, has grown by about 5% per year since 2003. The economy grew an estimated 3.9% in 2008, slowed by the global financial crisis. The government's prudent fiscal policy and structural reforms over the past few years have helped to induce strong foreign investment, tax revenues, and private consumption, setting the economy on a solid growth path.

GDP (purchasing power parity)

$201.4 billion (2008 est.)
$193.3 billion (2007 est.)
$183.4 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$201.8 billion (2008 est.)

GDP - real growth rate

4.2% (2008 est.)
5.4% (2007 est.)
5.2% (2006 est.)

GDP - per capita (PPP)

$28,300 (2008 est.)
$27,700 (2007 est.)
$26,700 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 2.6%
industry: 32.4%
services: 65% (2008 est.)

Population below poverty line

21.6%
note: Israel's poverty line is $7.30 per person per day (2005)

Labor force

2.957 million (2008 est.)

Labor force - by occupation

agriculture: 2%
industry: 16%
services: 82% (30 September 2008)

Unemployment rate

6.1% (2008 est.)
7.3% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 2.6%
highest 10%: 24.2% (2007)

Distribution of family income - Gini index

38.6 (2005)
35.5 (2001)

Investment (gross fixed)

18.1% of GDP (2008 est.)

Budget

revenues: $59.98 billion
expenditures: $64.21 billion (2008 est.)

Public debt

78% of GDP (2008 est.)
104.5% of GDP (2004 est.)

Inflation rate (consumer prices)

4.6% (2008 est.)
0.5% (2007 est.)

Central bank discount rate

NA% (31 December 2008)
4% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
6.27% (31 December 2007)

Stock of money

$NA (31 December 2008)
$15.36 billion (31 December 2006)

Stock of quasi money

$NA (31 December 2008)
$154.3 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$113.4 billion (31 December 2006)

Industries

high-technology projects (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, construction, metals products, chemical products, plastics, diamond cutting, textiles, footwear

Industrial production growth rate

3.5% (2008 est.)

Electricity - production

48.7 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 99.9%
hydro: 0.1%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

44.74 billion kWh (2006 est.)

Electricity - exports

1.844 billion kWh (2006 est.)

Electricity - imports

0 kWh (2007 est.)

Oil - production

5,966 bbl/day (2007 est.)

Oil - consumption

232,300 bbl/day (2006 est.)

Oil - imports

334,300 bbl/day (2005)

Oil - exports

82,910 bbl/day (2005)

Oil - proved reserves

1.94 million bbl (1 January 2008 est.)

Natural gas - production

2.35 billion cu m (2006 est.)

Natural gas - consumption

2.27 billion cu m (2006 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

0 cu m (2007 est.)

Natural gas - proved reserves

30.44 billion cu m (1 January 2008 est.)

Current Account Balance

$1.596 billion (2008 est.)
$4.185 billion (2007 est.)

Agriculture - products

citrus, vegetables, cotton; beef, poultry, dairy products

Exports

$56.64 billion (2008 est.)
$50.07 billion (2007 est.)

Exports - commodities

machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel

Exports - partners

US 32.5%, Belgium 7.5%, Hong Kong 6.7% (2008)

Imports

$64.31 billion (2008 est.)
$55.93 billion (2007 est.)

Imports - commodities

raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods

Imports - partners

US 12.3%, Belgium 6.5%, China 6.5%, Switzerland 6.1%, Germany 6% (2008)

Reserves of foreign exchange and gold

$42.51 billion (31 December 2008 est.)
$28.52 billion (31 December 2007 est.)

Debt - external

$86.08 billion (31 December 2008)
$89.58 billion (31 December 2007)

Stock of direct foreign investment - at home

$56.93 billion (31 December 2008 est.)
$55.7 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$54.55 billion (31 December 2008 est.)
$48.47 billion (31 December 2007 est.)

Market value of publicly traded shares

$134.5 billion (31 December 2008)
$236.4 billion (31 December 2007)
$173.3 billion (31 December 2006)

Economic aid - recipient

$240 million from US (FY06)

Currency (code)

new Israeli shekel (ILS); note - NIS is the currency abbreviation; ILS is the International Organization for Standardization (ISO) code for the NIS

Currency (code)

ILS

Exchange rates

new Israeli shekels (ILS) per US dollar - 3.56 (2008 est.), 4.14 (2007), 4.4565 (2006), 4.4877 (2005), 4.482 (2004)

Fiscal year

calendar year