Israel Economy 2007

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, which is its major source of economic and military aid. The bitter Israeli-Palestinian conflict; difficulties in the high-technology, construction, and tourist sectors; and fiscal austerity in the face of growing inflation led to small declines in GDP in 2001 and 2002. The economy rebounded in 2003-05, growing at a 4% to 5.2% rate each year, as the government tightened fiscal policy and implemented structural reforms to boost competition and efficiency in the markets. The conflict with Lebanon in summer 2006 slightly dampened GDP growth, but continuing strong foreign investment, tax revenue, and private consumption levels helped the economy recover quickly.

GDP (purchasing power parity):
$170.3 billion (2006 est.)

GDP (official exchange rate):
$140.3 billion (2006 est.)

GDP - real growth rate:
5.1% (2006 est.)

GDP - per capita (PPP):
$26,800 (2006 est.)

GDP - composition by sector:
agriculture: 2.5%
industry: 30.3%
services: 67.2% (2006 est.)

Labor force:
2.81 million (2006 est.)

Labor force - by occupation:
agriculture, forestry, and fishing 1.8%, manufacturing 15.7%, construction 5.3%, wholesale and retail trade 12.9%, transport, storage, and communications 6.3%, finance and business 16.9%, personal and other services 11.5%, public services 28.6% (1996)

Unemployment rate:
8.3% (2006 est.)

Population below poverty line:
21.6% (2005)

Household income or consumption by percentage share:
lowest 10%: 2.4%
highest 10%: 28.3% (2005)

Distribution of family income - Gini index:
38.6 (2005)

Inflation rate (consumer prices):
2.1% (2006 est.)

Investment (gross fixed):
17.1% of GDP (2006 est.)

Budget:
revenues: $48.38 billion
expenditures: $49.62 billion (2006 est.)

Public debt:
84.9% of GDP (2006 est.)

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

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:
8.6% (2006 est.)

Electricity - production:
46.85 billion kWh (2005)

Electricity - consumption:
43.28 billion kWh (2005)

Electricity - exports:
1.663 billion kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
100 bbl/day (2006 est.)

Oil - consumption:
249,500 bbl/day (2006 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
2 million bbl (1 January 2006)

Natural gas - production:
709.7 million cu m (2005 est.)

Natural gas - consumption:
709.7 million cu m (2005 est.)

Natural gas - exports:
0 cu m (2005 est.)

Natural gas - imports:
0 cu m (2005)

Natural gas - proved reserves:
37.34 billion cu m (1 January 2006 est.)

Current account balance:
$7.99 billion (2006 est.)

Exports:
$43.73 billion f.o.b. (2006 est.)

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

Exports - partners:
US 38.4%, Belgium 6.5%, Hong Kong 5.9% (2006)

Imports:
$46.96 billion f.o.b. (2006 est.)

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

Imports - partners:
US 12.4%, Belgium 8.2%, Germany 6.7%, Switzerland 5.9%, UK 5.1%, China 5.1% (2006)

Economic aid - recipient:
$240 million from US (FY06)

Reserves of foreign exchange and gold:
$29.15 billion (2006 est.)

Debt - external:
$83.01 billion (2006 est.)

Stock of direct foreign investment - at home:
$47.39 billion (2006 est.)

Stock of direct foreign investment - abroad:
$34.89 billion (2006 est.)

Market value of publicly traded shares:
$173.3 billion (2006)

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

Exchange rates:
new Israeli shekels per US dollar - 4.4565 (2006), 4.4877 (2005), 4.482 (2004), 4.5541 (2003), 4.7378 (2002)