Israel/Economy

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. 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. The influx of Jewish immigrants from the former USSR topped 750,000 during the period 1989-99, bringing the population of Israel from the former Soviet Union to 1 million, one-sixth of the total population, and adding scientific and professional expertise of substantial value for the economy's future. The influx, coupled with the opening of new markets at the end of the Cold War, energized Israel's economy, which grew rapidly in the early 1990s. But growth began slowing in 1996 when the government imposed tighter fiscal and monetary policies and the immigration bonus petered out. Those policies brought inflation down to record low levels in 1999 and, coupled with improved prospects for the Middle East peace process, are creating a climate for stronger GDP growth in the year 2000.

GDP: purchasing power parity - $105.4 billion (1999 est.)

GDP - real growth rate: 2.1% (1999 est.)

GDP - per capita: purchasing power parity - $18,300 (1999 est.)

GDP - composition by sector:
agriculture: 2%
industry: 17%
services: 81% (1997 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 26.9% (1992)

Inflation rate (consumer prices): 1.3% (1999 est.)

Labor force: 2.3 million (1997)

Labor force - by occupation: public services 31.2%, 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: 9.1% (1999 est.)

Budget:
revenues: $40 billion
expenditures: $42.4 billion, including capital expenditures of $NA (2000 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 - production: 35.338 billion kWh (1998)

Electricity - production by source:
fossil fuel: 99.9%
hydro: 0.1%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 31.805 billion kWh (1998)

Electricity - exports: 1.061 billion kWh (1998)

Electricity - imports: 2 million kWh (1998)

Agriculture - products: citrus, vegetables, cotton; beef, poultry, dairy products

Exports: $23.5 billion (f.o.b., 1999)

Exports - commodities: machinery and equipment, software, cut diamonds, chemicals, textiles and apparel, agricultural products

Exports - partners: US 32%, UK, Hong Kong, Benelux, Japan, Netherlands (1997)

Imports: $30.6 billion (f.o.b., 1999)

Imports - commodities: raw materials, military equipment, investment goods, rough diamonds, fuels, consumer goods

Imports - partners: US 19%, Benelux 12%, Germany 9%, UK 8%, Italy 7%, Switzerland 6% (1997)

Debt - external: $18.7 billion (1997)

Economic aid - recipient: $1.1 billion from the US (1999)

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

Exchange rates: new Israeli shekels (NIS) per US$1 - 4.2260 (November 1999), 3.8001 (1999), 3.4494 (1997), 3.1917 (1996), 3.0113 (1995)

Fiscal year: calendar year