ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the September 2007 issue


Israel's economy: Update

The Ministry of Finance has published an updated summary of Israel's economic situation, showing impressive growth in many areas.

Israeli industrial production growth in 2006 was the highest in the world (37.1%), and the Wall Street Journal called Israel "the best initiative economy in the world." After recording a higher GDP growth in 2006 than the OECD countries, the Ministry of Finance reports an annual GDP growth in the 1st quarter of 2007 of 6.3%, and an annual export growth for the same period of 11.1%. The Israel Export Institute reports that the industrial deficit for the first quarter of 2007 was down by 6%.

The expected inflation rate for this year of 2-3%, is the third lowest in the world, according to The Economist. The Bank of Israel has lowered the interest rate to 3.5%. Standard & Poor has recently upgraded Israel's credit rating to "positive," joining a similar action on behalf of Moody's and Fitch in 2006.

Foreign direct investments in 2007 are expected to grow by 8.0%, reaching $15.3 billion, as compared to $14.2 billion in 2006 (2005: $4.8 billion; 2004: $2.1 billion). Foreign stock investments in January attained an all-time peak of $460 million. There is also a growing trend of Israeli investments abroad: $30 billion in 2006 (2005: $18 billion; 2004: $13 billion).



Reprinted from the Israel High-Tech & Investment Report September 2007

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