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Israel (also see separate Gaza Strip and West Bank entries) 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. Manufacturing and construction employ about 28% of Israeli workers; agriculture, forestry, and fishing 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. The influx of Jewish immigrants from the former USSR topped 750,000 during the period 1989-98, bringing the population of Israel from the former Soviet Union to one 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.

    GDP: purchasing power parity—$101.9 billion (1998 est.)

    GDP—real growth rate: 1.9% (1998 est.)

    GDP—per capita: purchasing power parity—$18,100 (1998 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): 5.4% (1998 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: 8.7% (1998 est.)

    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—production: 28.035 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 99.88%
    hydro: 0.12%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 27.725 billion kWh (1996)

    Electricity—exports: 310 million kWh (1996)

    Electricity—imports: 0 kWh (1996)

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

    Exports: $22.1 billion (f.o.b., 1998)

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

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

    Imports: $26.1 billion (f.o.b., 1998)

    Imports—commodities: raw materials, military equipment, investment goods, rough diamonds, oil, 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: $1.241 billion (1994); note—$1.2 billion from the US (1997)

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

    Exchange rates: new Israeli shekels (NIS) per US$1—4.2269 (November 1998), 3.4494 (1997), 3.1917 (1996), 3.0113 (1995), 3.0111 (1994)

    Fiscal year: calendar year (since 1 January 1992)

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)