Israel has a technologically advanced market economy with minimum government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Israel has developed its agricultural and industrial sectors over the past few decades.

Exports were a major driver of the country’s economic growth in the 1990s. In the last few years, the economy has grown by over five per cent annually. The conflict with Hezbollah in 2006 slightly dampened GDP growth, but continuing foreign investment, along with increasing tax revenue and private consumption levels helped the economy recover quickly.

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) in the third quarter of 2010 was NIS 207,637 million.

(Source: Central Bureau of Statistics)

The country’s GDP at current prices was NIS 768,339 million in 2009, as compared to NIS 725,861 million in 2008. Israel's GDP growth in 2007 was 5.3%, however it dipped to 4.2% in 2008 and further to 0.8% in 2009.

GDP per capita

 

(Source: Central Bureau of Statistics)

The nation’s GDP per capita at constant price was NIS 969,352 in 2009. The GDP per capita at PPP for 2010 was estimated at USD 29,405. The GDP per capita, PPP was USD 28,581 in 2009, as compared to USD 28,715 in 2008.

(Source: Central Bureau of Statistics, dfat.gov.au)

Gross National Income (GNI)

 

The nation’s gross national income (GNI) was NIS 750,312 million for 2009, as compared to NIS 711,246 for 2008.

(Source: Central Bureau of Statistics)

GNI per capita

Israel’s GNI per capita in 2009 was 27,110 (measured in current international dollars) as compared to 27,120 in 2008.

Foreign trade

The country’s exports in 2010 (till September) amounted NIS 220,877 million, while imports by the country was NIS 207,671 million.

(Source: Central Bureau of Statistics)

 

(Source: Central Bureau of Statistics)

Exports of goods and services by the country for 2009 amounted to NIS 266,254 million (at current prices,) as compared to NIS 290,819 in 2008. The imports in 2009 were valued at NIS 247,508 million, as compared to NIS 301,309 million in 2008.

Israel’s major export destination for 2009 was United States, with 35% of total exports, followed by Hong Kong and Belgium with 6.0% and 4.9% respectively. The United States was also a major source of imports for Israel as it contributed 12.4% of total imports followed by China and Germany contributing 7.4% and 7.1% respectively.

(Source: dfat.gov.au)

Taxes in Israel

Israelis pay tax on all sources of income in the country and abroad. Individual income tax in 2010 ranged from 10% to 45%.

 

Income (NIS)	Tax %
1-57,240	10%
57,241-101,640	14%
101,641-152,640	23%
152,641-219,000	30%
219,001-472,080	33%
472,081 and over	45%

(Source: Worldwide-tax)

 Corporate tax in the country was fixed at 25% in 2010, which also includes income tax.

 Social Security taxes in Israel are subject to a monthly payment of NIS 76,830.

(Source: Worldwide-tax)

Inflation rate

Inflation rate in Israel for 2010 was 2.7%,decreasing from the inflation of 3.3% in 2009.

 

(Source: Central Bureau of Statistics, Central Bank of Israel)

The inflation in the year 2011 is forecasted to be 2.8%, according to International Monetary Fund and Economist Intelligence Unit.

FDI inflow

In 2009, Foreign Direct Investment (FDI) inflow was USD 3,894 million, as compared USD 10,877 million in 2008. The FDI inflow into the country in 2009 decreased by 64.2% from the previous year.

(Source: Central Bureau of Statistics)

Banking sector assets

The table below displays the assets of the Central Bank of Israel.

Currency Unit: New Israeli Shekel (NIS)

Summary consolidated balance sheet (NIS million)	End of Period
	2010 (Q3)	2009	2008	2007
Cash and deposits in banks	125,459	160,785	125,978	125,733
Securities	154,717	150,871	137,475	170,138
Securities borrowed or purchased under agreements to resell	-	3,488	1,435	2,291
Credit to the public	756,807	721,960	732,428	663,282
Credit to the government	2,298	2,973	2,283	1,425
Investments in companies included on an equity basis	3,970	4,490	4,548	4,908
Buildings and equipment	13,585	13,856	13,554	12,705
Other assets	35,716	29,955	44,533	26,493
Total assets	1,095,485	1,088,378	1,062,234	1,006,974

(Source: CentralBank of Israel) 

Consumer price index (CPI)

Consumer price index for January 2011 (base, year 2010 = 100) was 102.0. Percentage change of CPI over previous month was 0.2%.

(Source: Central Bureau of Statistics)

Base, Year 2006 = 100

(Source: Central Bureau of Statistics)

Wholesale Price Index

Base, Year 2005 = 100

(Source: Central Bureau of Statistics)

Interest rates

In December 2010, the Bank of Israel offered an interest rate of 1.99%.

 

Average interest on deposits in Bank of Israel
Period	Interest rate
1/2010	1.25
2/2010	1.25
3/2010	1.25
4/2010	1.5
5/2010	1.5
6/2010	1.5
7/2010	1.5
8/2010	1.75
9/2010	1.75
10/2010	1.95
11/2010	1.99
12/2010	1.99

(Source: Central Bank of Israel)

Money supply (currency in circulation)

According to the Central Bank of Israel, money in circulation at the end of November 2010 was NIS 113,769.4 million.

 

(Source: Central Bank of Israel)

 Government expenditure

Government expenditures in Israel for 2009 was NIS 330,074 million, exceeded its revenue, creating  current deficit of NIS 22,387 million, as compared NIS 4,643 million in 2008.

Expenditure of Government of Israel (NIS million)
	2009	2008
Total Expenditure	330,074	312,375
Consumption expenditure	185,501.6	179,615.6
Interest on the public debt	28,056.29	26,239.5
Subsidies	6,271.41	5,622.75
Current transfers to households and private non-profit institutions	80,207.98	73,408.13
Capital transfers to private sector	16,173.63	14,369.25
Gross capital formation	13,533.03	13,119.75

(Source: Central Bureau of Statistics)

 

Government Expenditure by function, 2009 (NIS million)
	%
Social protection	27.7
Education	16.4
Defence	15.1
Health	10.7
Interest payments	8.5
General services and public order	8.2
Economic affairs	7.2
Others	6.1

 

(Source: Central Bureau of Statistics)

Official exchange rate

NIS per dollar for 2010 was registered at 3.73.

 

(Source: Central Bank of Israel)

Government finances

Fiscal balance

 

(Source: Central Bank of Israel)

Fiscal deficit for 2010 was NIS 24,304.43 million, compared to NIS 33,925.76 million in 2009.

Total revenue

The country's revenue in 2009 was recorded at NIS 295,444 million, decreasing 0.8% from the 2008 figure of NIS 297,586 million.

Revenues of Government of Israel (NIS million)
	2008	2009
Total Revenue	297,586	295,444
Property and entrepreneurial income	9225.16	12704.09
Taxes, fees and levies	205036.8	199720.1
National Insurance contributions and other transfers from the private sector	50589.62	51702.7
Transfers from abroad	15474.47	13885.87
Imputation for consumption of fixed capital	10415.51	10635.98
Capital transfers from private sector	6546.9	6499.77
Capital transfers from abroad	595.17	295.44

(Source: Central Bureau of Statistics)

 Tax revenue

Tax revenues in Israel, at the end of November 2010, were NIS 221,079.0 million, which is an increase of 10.4% over the previous year.

Tax Revenues And Transfer Payments From The Public (NIS million)
	2009	2010 (till November)
Direct taxes and National Insurance payments	123,868.7	122,953.6
Indirect taxes on domestic production	76,104.1	78,158.9
Taxes on civilian imports	22,433.4	23,051.4
Transfer payments from the public	4,651.5	5,887.8
Total	218,207.6	221,267

(Source: Central Bank of Israel)

Current account balance - surplus/deficit

Israel has registered a current account surplus for each year since 2003.  

(Source: Central Bureau of Statistics)

Balance of payment

Balance of Payment (USD million)
	2010 (Jan to Sept)			2009
	Q1	Q2	Q3	Q1	Q2	Q3	Q4
Current account balance	1,972	2,404	910	2,388	1,516	88	3,600
Capital balance	226	236	220	222	206	243	237
Financial account	2,380	5,946	1,220	2,334	2,318	2,814	3,446

(Source: Central Bureau of Statistics)

Labour force in Israel was recorded at 3.01 million people in 2009, increasing by about 2% from the previous year’s labour population. Specifically, females accounted for about 51.9% of the total labour force in 2009, while males accounted for 61.6%.

(Source: Central Bureau of Statistics)

(Source: Central Bureau of Statistics)

In 2009, the total number of employed people was 2.786 million, increasing by 9,200 people over the previous year. 

(Source: Central Bureau of Statistics) 

Unemployment

7.1% of total labour force was unemployed in 2009 as compared to 6.6% in 2008.

(Source: Central Bureau of Statistics) 

(Source: Central Bureau of Statistics)

The total labour force participation rate in Israel was 56.6% for 2009. Specifically, for females, the participation rate was 52%, while for males it was 61.5%.

(Source: Central Bureau of Statistics)

Minimum wage

Minimum wages in 2010 were NIS 3,850 per month, but they are expected to rise to NIS 4,100 in July 2011, and to further rise to NIS 4,300 by October 2012.

(Source: Bloomberg, Central Bureau of Statistics)

 Level of unionisation

Organised labour in the country belongs to numerous trade unions. The majority of the trade unions belong to New Histadrut consisting of more than 700,000 members. The National Workers' Organisation has more than 300,000 members. The other active unions, which are not affiliated to Histradut, include the Teachers’ Organisation (Irgun Hamorim) and the Israeli Medical Association (Hahistadrut Harefuit).

Of the total labour force in Israel, approximately 40% are members of trade unions.

(Source: organization.haifa.ac)

Government

 Israel is a parliamentary democracy. The Parliament is made up of 120 members elected every four years on the basis of proportional representation and is called The Knesset.

The Prime Minister is a member of the Knesset. Suprisingly, no Israeli political party has ever won an absolute majority in the Knesset.

The President is the Head of State, and has a largely ceremonial role. He is elected by a secret Knesset vote for a single seven-year term.

Israel does not have a written constitution, but a series of Basic Laws. The law stipulates that elections should be held every four years.

Shimon Peres is currently the President,as of February 2009, with Benjamin Netanyahu as the Prime Minister.

The major political parties in Israel include:

• Kadima
• Likud
• Yisrael Beitenu
• Labor
• Shas

(Source: Knesset)

Israel economic freedom score in the 2011 Index of Economic Freedom is 68.5, making its economy the 43^rd freest globally. In the Middle East/North Africa region, Israel ranks 5^th out of 17 countries. Israel’s overall score is higher than the global and regional averages.

Population

The total population of Israel at the end of November 2010 was 7.7 million.

(Source: Central Bureau of Statistics)

According to the Central Bureau of Statistics, the population is expected to cross the 10 million mark in the year 2030.

Gender ratio

The gender ratio in the country is almost balanced, there are about 98.4 males for every 100 females in the country.

(Source: Central Bureau of Statistics, UN)

In 2009, the population below 14 years of age constituted 27.9% of the total population, and 9.8% were above the age of 65.

Mortality rate

The country registered an infant mortality rate (per 1,000 live births) of 4.7 in 2009. The mortality rate for females from 2005 to 2009 was recorded at 5.4 deaths, compared to 5.5 male deaths. Furthermore, the average life expectancy in 2009 for men was 79.7 years and for females it was 83.5 years.

(Source: Central Bureau of Statistics)

Birth rate

The birth rate in the country was 22 births per 1000 in 2009.

(Source: World Bank)

Median age

The median age of country for 2009 was 29.3.

Migration and urbanisation

International migrant stock, till mid 2010, was recorded at 2,940,500 people, or 40.4% of the entire population.

(Source: UN, Central Bureau of Statistics)

The number of people living in urban localities in 2009 was 6.9 million people, or more than 90% of the total population.

According to figures from the United Nations, the country’s urban population grew at an annual rate of 1.7% between 2005 and 2010. Alternatively, in the same period, the rural population grew at a rate of 1.4% per year.

(Source: UN,Central Bureau of Statistics)

Ethnicity

Major ethnic groups in Israel are:

• Jews 80%
• Arabs 20%

(Source: Central Bureau of Statistics)

Human Development Index (HDI)

The country ranks 15^th out of 169 countries on the Human Development index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income). 

(Source: UNDP)

Education

Literacy rate in the country is estimated to be 97%.

• Education is a fundamental value in the country and is recognized by the government as a key to the future.
• The educational system is based on Jewish values
• The education system consists of three main tracks – State Education, State Religious Education, and Independent Education

A separate educational structure is maintained for Arab students, though some Arabs study in the Jewish system.

The curriculum throughout the Israeli educational system is centralized through the Ministry of Education and Culture. The language of instruction in Jewish Schools is Hebrew and Arabic in Arab schools.

The free compulsory education law (1979) provides compulsory and free education to children between five and sixteen. Furthermore, education for children above the age of sixteen is free but not compulsory.

Healthcare

The healthcare system in Israel includes a high standard of health services, medical technology and research. The country has modern hospital facilities and an impressive ratio of physicians to population. The Ministry of Health is responsible for the development of health policy, the government’s health care budget and operation of the public health services.

(Source: Central Bureau of Statistics)

The country had 371 hospitals in 2009, of which the majority were private.

The leading causes of death in Israel include cancer, heart disease, diabetes, disease of the respiratory system and cerebro-vascular diseases.

 (Source: Central Bureau of Statistics)

The expenditure on health in 2009 was NIS 55,356 million, amounting to 7.9% of the GDP.

Mass public transit

(Source: Central Bureau of Statistics)

Railways

The total length of railway lines in the country in 2009 was 960 km.

(Source: Central Bureau of Statistics)

Ports

Major ports in Israel are:

• Port of Ashdod
• Port of Ashkelon
• Port of Eilat
• Port of Hasdera
• Port of Haifa

(Source: world port source)

Airports

Major airports in the country include:

(Source: Air charter world)

Telecommunications networks

In 2009, the country had 125.84 mobile subscribers per 100 people.

(Source: ITU)

In 2010, 7.35 million people, 71.6% of the total population, used internet services. While in 2000, the number of internet users accounted for only 18.2% of total population.

(Source:internetworldstats.com)