Economy in Israel

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Economy—overview: Israel has a technologically advanced market economy with substantial 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. Manufacturing and construction employ about 28% of Israeli workers; agriculture forestry and fishing only 2.6%; and services the rest. Israel is largely self-sufficient in food production except for grains. Diamonds high-technology equipment and agricultural products (fruits and vegetables) are leading exports. Israel usually posts sizable current account 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 which is its major source of economic and military aid. To earn needed foreign exchange Israel has been targeting high-technology niches in international markets such as medical scanning equipment. The influx of Jewish immigrants from the former USSR topped 750 000 during the period 1989-97 bringing the population of Israel from the former Soviet Union to one million or one-sixth of the total population. Initially this great influx increased unemployment intensified housing problems and strained the government budget. At the same time the immigrants bring to the economy scientific and professional expertise of substantial value for the future.

GDP: purchasing power parity—$96.7 billion (1997 est.)

GDP—real growth rate: 1.9% (1997 est.)

GDP—per capita: purchasing power parity—$17 500 (1997 est.)

GDP—composition by sector:

agriculture: 2%

industry: 17%

services: 81% (1997 est.)

Inflation rate—consumer price index: 2.4% (2004)

Labor force:

total: 2.3 million (1997)

by occupation: public services 31.3% manufacturing 20.2% finance and business 13.1% commerce 12.8% construction 7.5% personal and other services 6.4% transport storage and communications 6.2% agriculture forestry and fishing 2.6% (1996)

Unemployment rate: 7.7% (1997)

Budget:

revenues: $55 billion

expenditures: $58 billion including capital expenditures of $NA (1998 est.)

Industries: food processing diamond cutting and polishing textiles and apparel chemicals metal products military equipment transport equipment electrical equipment potash mining high-technology electronics tourism

Industrial production growth rate: 5.4% (1996)

Electricity—capacity: 7.736 million kW (1996)

Electricity—production: 32.5 billion kWh (1996)

Electricity—consumption per capita: 5 387 kWh (1995)

Agriculture—products: citrus and other fruits vegetables cotton; beef poultry dairy products

Exports:

total value: $20.7 billion (f.o.b. 1997)

commodities: machinery and equipment cut diamonds chemicals textiles and apparel agricultural products metals

partners: EU 32% US 31% Japan 7% (1996)

Imports:

total value: $28.6 billion (c.i.f. 1997)

commodities: military equipment investment goods rough diamonds oil consumer goods

partners: EU 52% US 20% Japan (1996)

Debt—external: $18.7 billion (1997)

Economic aid:

recipient: $1.2 billion (1997) from the US

Currency: 1 new Israeli shekel (NIS) = 100 new agorot

Exchange rates: new Israeli shekels (NIS) per US$1— 4.3 (January 2004) 3.5340 (December 1997) 3.4494 (1997) 3.1917 (1996) 3.0113 (1995) 3.0111 (1994) 2.8301 (1993)

Fiscal year: calendar year (since 1 January 1992)

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