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Israel vs. Egypt

Economy

IsraelEgypt
Economy - overview

Israel has a technologically advanced free market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among its leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are offset by tourism and other service exports, as well as significant foreign investment inflows.

Between 2004 and 2013, growth averaged nearly 5% per year, led by exports. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals, following years of prudent fiscal policy and a resilient banking sector. Israel's economy also weathered the 2011 Arab Spring because strong trade ties outside the Middle East insulated the economy from spillover effects.

Slowing domestic and international demand and decreased investment resulting from Israel’s uncertain security situation reduced GDP growth to an average of roughly 2.8% per year during the period 2014-17. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds in the last decade. Political and regulatory issues have delayed the development of the massive Leviathan field, but production from Tamar provided a 0.8% boost to Israel's GDP in 2013 and a 0.3% boost in 2014. One of the most carbon intense OECD countries, Israel generates about 57% of its power from coal and only 2.6% from renewable sources.

Income inequality and high housing and commodity prices continue to be a concern for many Israelis. Israel's income inequality and poverty rates are among the highest of OECD countries, and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. Government officials have called for reforms to boost the housing supply and to increase competition in the banking sector to address these public grievances. Despite calls for reforms, the restricted housing supply continues to impact younger Israelis seeking to purchase homes. Tariffs and non-tariff barriers, coupled with guaranteed prices and customs tariffs for farmers kept food prices high in 2016. Private consumption is expected to drive growth through 2018, with consumers benefitting from low inflation and a strong currency.

In the long term, Israel faces structural issues including low labor participation rates for its fastest growing social segments - the ultraorthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only about 8% of the workforce, with the rest mostly employed in manufacturing and services - sectors which face downward wage pressures from global competition. Expenditures on educational institutions remain low compared to most other OECD countries with similar GDP per capita.

Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley where most economic activity takes place. Egypt's economy was highly centralized during the rule of former President Gamal Abdel NASSER but opened up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Agriculture, hydrocarbons, manufacturing, tourism, and other service sectors drove the country’s relatively diverse economic activity.

Despite Egypt’s mixed record for attracting foreign investment over the past two decades, poor living conditions and limited job opportunities have contributed to public discontent. These socioeconomic pressures were a major factor leading to the January 2011 revolution that ousted MUBARAK. The uncertain political, security, and policy environment since 2011 has restricted economic growth and failed to alleviate persistent unemployment, especially among the young.

In late 2016, persistent dollar shortages and waning aid from its Gulf allies led Cairo to turn to the IMF for a 3-year, $12 billion loan program. To secure the deal, Cairo floated its currency, introduced new taxes, and cut energy subsidies - all of which pushed inflation above 30% for most of 2017, a high that had not been seen in a generation. Since the currency float, foreign investment in Egypt’s high interest treasury bills has risen exponentially, boosting both dollar availability and central bank reserves. Cairo will be challenged to obtain foreign and local investment in manufacturing and other sectors without a sustained effort to implement a range of business reforms.

GDP (purchasing power parity)
$317.1 billion (2017 est.)
$307 billion (2016 est.)
$295.3 billion (2015 est.)

note: data are in 2017 dollars

$1.204 trillion (2017 est.)
$1.155 trillion (2016 est.)
$1.107 trillion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
3.3% (2017 est.)
4% (2016 est.)
2.6% (2015 est.)
4.2% (2017 est.)
4.3% (2016 est.)
4.4% (2015 est.)
GDP - per capita (PPP)
$36,400 (2017 est.)
$35,900 (2016 est.)
$35,200 (2015 est.)

note: data are in 2017 dollars

$12,700 (2017 est.)
$12,800 (2016 est.)
$12,400 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 2.4% (2017 est.)
industry: 26.5% (2017 est.)
services: 69.5% (2017 est.)
agriculture: 11.7% (2017 est.)
industry: 34.3% (2017 est.)
services: 54% (2017 est.)
Population below poverty line
22% (2014 est.) (2014 est.)

note: Israel's poverty line is $7.30 per person per day

27.8% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 1.7%
highest 10%: 31.3% (2010)
lowest 10%: 4%
highest 10%: 26.6% (2008)
Inflation rate (consumer prices)
0.2% (2017 est.)
-0.5% (2016 est.)
23.5% (2017 est.)
10.2% (2016 est.)
Labor force
4.021 million (2017 est.)
29.95 million (2017 est.)
Labor force - by occupation
agriculture: 1.1%
industry: 17.3%
services: 81.6% (2015 est.)
agriculture: 25.8%
industry: 25.1%
services: 49.1% (2015 est.)
Unemployment rate
4.2% (2017 est.)
4.8% (2016 est.)
12.2% (2017 est.)
12.7% (2016 est.)
Distribution of family income - Gini index
42.8 (2013)
39.2 (2008)
31.8 (2015)
29.8 (2012)
Budget
revenues: 93.11 billion (2017 est.)
expenditures: 100.2 billion (2017 est.)
revenues: 42.32 billion (2017 est.)
expenditures: 62.61 billion (2017 est.)
Industries
high-technology products (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, pharmaceuticals, construction, metal products, chemical products, plastics, cut diamonds, textiles, footwear
textiles, food processing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, light manufactures
Industrial production growth rate
3.5% (2017 est.)
3.5% (2017 est.)
Agriculture - products
citrus, vegetables, cotton; beef, poultry, dairy products
cotton, rice, corn, wheat, beans, fruits, vegetables; cattle, water buffalo, sheep, goats
Exports
$58.67 billion (2017 est.)
$56.17 billion (2016 est.)
$23.3 billion (2017 est.)
$20.02 billion (2016 est.)
Exports - commodities
machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel
crude oil and petroleum products, fruits and vegetables, cotton, textiles, metal products, chemicals, processed food
Exports - partners
US 28.8%, UK 8.2%, Hong Kong 7%, China 5.4%, Belgium 4.5% (2017)
UAE 10.9%, Italy 10%, US 7.4%, UK 5.7%, Turkey 4.4%, Germany 4.3%, India 4.3% (2017)
Imports
$68.61 billion (2017 est.)
$63.9 billion (2016 est.)
$59.78 billion (2017 est.)
$57.84 billion (2016 est.)
Imports - commodities
raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods
machinery and equipment, foodstuffs, chemicals, wood products, fuels
Imports - partners
US 11.7%, China 9.5%, Switzerland 8%, Germany 6.8%, UK 6.2%, Belgium 5.9%, Netherlands 4.2%, Turkey 4.2%, Italy 4% (2017)
China 7.9%, UAE 5.2%, Germany 4.8%, Saudi Arabia 4.6%, US 4.4%, Russia 4.3% (2017)
Debt - external
$88.66 billion (31 December 2017 est.)
$87.96 billion (31 December 2016 est.)
$77.47 billion (31 December 2017 est.)
$62.38 billion (31 December 2016 est.)
Exchange rates
new Israeli shekels (ILS) per US dollar -
3.606 (2017 est.)
3.8406 (2016 est.)
3.8406 (2015 est.)
3.8869 (2014 est.)
3.5779 (2013 est.)
Egyptian pounds (EGP) per US dollar -
18.05 (2017 est.)
8.8 (2016 est.)
10.07 (2015 est.)
7.7133 (2014 est.)
7.08 (2013 est.)
Fiscal year
calendar year
1 July - 30 June
Public debt
60.9% of GDP (2017 est.)
62.3% of GDP (2016 est.)
103% of GDP (2017 est.)
96.8% of GDP (2016 est.)

note: data cover central government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are sold at public auctions

Reserves of foreign exchange and gold
$113 billion (31 December 2017 est.)
$95.45 billion (31 December 2016 est.)
$35.89 billion (31 December 2017 est.)
$23.2 billion (31 December 2016 est.)
Current Account Balance
$10.12 billion (2017 est.)
$11.94 billion (2016 est.)
-$14.92 billion (2017 est.)
-$19.83 billion (2016 est.)
GDP (official exchange rate)
$350.7 billion (2017 est.)
$236.5 billion (2017 est.)
Stock of direct foreign investment - at home
$129.1 billion (31 December 2017 est.)
$107.3 billion (31 December 2016 est.)
$106.6 billion (31 December 2017 est.)
$97.14 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$100.3 billion (31 December 2017 est.)
$98.11 billion (31 December 2016 est.)
$7.426 billion (31 December 2017 est.)
$7.257 billion (31 December 2016 est.)
Market value of publicly traded shares
$243.9 billion (31 December 2015 est.)
$200.5 billion (31 December 2014 est.)
$203.3 billion (31 December 2013 est.)
$27.35 billion (30 December 2016 est.)
$25.07 billion (31 December 2015 est.)
$26.33 billion (31 December 2014 est.)
Central bank discount rate
0.1% (15 December 2015)
0.25% (31 December 2014)
19.25% (9 July 2017)
15.25% (3 November 2016)
Commercial bank prime lending rate
3.5% (31 December 2017 est.)
3.42% (31 December 2016 est.)
18.18% (31 December 2017 est.)
13.6% (31 December 2016 est.)
Stock of domestic credit
$290.7 billion (31 December 2017 est.)
$257.4 billion (31 December 2016 est.)
$193.4 billion (31 December 2017 est.)
$178.7 billion (31 December 2016 est.)
Stock of narrow money
$100.4 billion (31 December 2017 est.)
$79.58 billion (31 December 2016 est.)
$43.4 billion (31 December 2017 est.)
$34.51 billion (31 December 2016 est.)
Stock of broad money
$100.4 billion (31 December 2017 est.)
$79.58 billion (31 December 2016 est.)
$43.4 billion (31 December 2017 est.)
$34.51 billion (31 December 2016 est.)
Taxes and other revenues
26.5% (of GDP) (2017 est.)
17.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-2% (of GDP) (2017 est.)
-8.6% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 7.3%
male: 6.7%
female: 7.8% (2017 est.)
total: 29.6%
male: 25.7%
female: 38.3% (2017 est.)
GDP - composition, by end use
household consumption: 55.1% (2017 est.)
government consumption: 22.8% (2017 est.)
investment in fixed capital: 20.1% (2017 est.)
investment in inventories: 0.7% (2017 est.)
exports of goods and services: 28.9% (2017 est.)
imports of goods and services: -27.5% (2017 est.)
household consumption: 86.8% (2017 est.)
government consumption: 10.1% (2017 est.)
investment in fixed capital: 14.8% (2017 est.)
investment in inventories: 0.5% (2017 est.)
exports of goods and services: 16.3% (2017 est.)
imports of goods and services: -28.5% (2017 est.)
Gross national saving
23.6% of GDP (2017 est.)
24.2% of GDP (2016 est.)
25% of GDP (2015 est.)
9% of GDP (2017 est.)
9.1% of GDP (2016 est.)
10.6% of GDP (2015 est.)

Source: CIA Factbook