Israel's economic indicators and business investment potential

Israel

Mini Country Report on Israel

This is a mini country report on Israel that gives an overview of the economy of the country. It includes data on economic indicators such as GDP, Imports and exports, exchange rate, balance of payments, government budget, and trends in the stock market. It also describes the business outlook and an assessment of potential for doing business in the country.

Gross Domestic Product (GDP)

Israel per capita GDP ($18,000) is the highest among all the countries in the Middle East and it is about 88% of the Average GDP of the OECD countries. Its total GDP for 2002 is U.S. $115,040 million. The GDP showed a rapid rise in the 1990s but has dropped slightly after 2000 ("Real GDP"- Country Watch; Klein)

Total Exports and Imports

The total exports and imports for 2002 were U.S. $37,887 million and U.S. $47,486 respectively (Estimated), showing a trade balance of U.S. $ -9,599 million. The trade imbalance has increased since 2000 when it was U.S. $ -5,984 million. ("Trade Balance"-Country Watch)

Balance of Payments

The current account balance for 2002 shows a figure of U.S. $ -6.612 billion, which is -7.0% of the GDP. ("Balance of Payments" Table from Country Watch)

Value of Currency v U.S. $

At present, 1 U.S. $ = 4.45132 ILS Israel New Shekels. It had an average exchange value of NIS 4.21/U.S.$ during 2001, but ended the year at NIS 4.4/U.S.$ and had fallen to NIS 4.7/U.S.$ in the first quarter of 2002. Since then it has recovered mainly due to the weakness of U.S. dollar. ("Economic Overview"-Country Watch)

National Government Budget

The government budget showed a deficit of -26.07 billion NIS (estimated) for 2002. The expenditures for the year were 239.6 billion NIS and revenues were 213.5 billion NIS. This shows a substantial change from 2000 when the government had a surplus of 4.02 b. NIS. ("Government Sector"-Country Watch)

Recent Events

The recent announcement of a "road map" for peace in the Middle East by President Bush and the relatively quick U.S. victory in the war against Iraq are two recent developments that would have the most significant long-term effect on business prospects in Israel. Any businessperson looking at the country for possible investment would have to follow the developments on these two issues very closely.

Assessment of Potential v Risk

Any assessment for future prospects of doing business in Israel has to be looked at in the context of prospects of peace in the Middle East. At the moment, with the United States apparently determined to follow through with its peace plan, the future business prospects in Israel seem bright.