Israel: 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. 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 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 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 grew at 1% in 2003, with improvements in tourism and foreign direct investment. In 2004, rising business and consumer confidence - as well as higher demand for Israeli exports - are forecast to boost GDP by 2.5%.

GDP

purchasing power parity - $120.6 billion (2003 est.)

GDP - real growth rate

1% (2003 est.)

GDP - per capita

purchasing power parity - $19,700 (2003 est.)

GDP - composition by sector

agriculture: 2.6%
industry: 36.2%
services: 61.2% (2001 est.)

Population below poverty line

18% (2001 est.)

Household income or consumption by percentage share

lowest 10%: 2.4%
highest 10%: 28.3% (1997)

Distribution of family income - Gini index

35.5 (2001)

Inflation rate (consumer prices)

1.1% (2003 est.)

Labor force

2.6 million (2003 est.)

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

10.7% (2003 est.)

Budget

revenues: $38.5 billion
expenditures: $45.1 billion, including capital expenditures of $NA (2002 est.)

Industries

high-technology projects (including aviation, communications, computer-aided design and manufactures, medical electronics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, diamond cutting

Industrial production growth rate

0.7% (2003 est.)

Electricity - production

42.24 billion kWh (2001)

Electricity - production by source

fossil fuel: 99.9%
hydro: 0.1%
other: 0% (2001)
nuclear: 0%

Electricity - consumption

37.82 billion kWh (2001)

Electricity - exports

1.457 billion kWh (2001)

Electricity - imports

0 kWh (2001)

Oil - production

80 bbl/day (2001 est.)

Oil - consumption

260,000 bbl/day (2001 est.)

Oil - exports

NA

Oil - imports

NA

Oil - proved reserves

1.92 million bbl (1 January 2002)

Natural gas - production

10 million cu m (2001 est.)

Natural gas - consumption

10 million cu m (2001 est.)

Natural gas - exports

0 cu m (2001 est.)

Natural gas - imports

0 cu m (2001 est.)

Natural gas - proved reserves

20.81 billion cu m (1 January 2002)

Agriculture - products

citrus, vegetables, cotton; beef, poultry, dairy products

Exports

$29.32 billion f.o.b. (2003 est.)

Exports - commodities

machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel

Exports - partners

US 40.3%, Belgium 6.3%, Hong Kong 4.7%, UK 4% (2002)

Imports

$32.27 billion f.o.b. (2003 est.)

Imports - commodities

raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods

Imports - partners

US 18.5%, Belgium 9.1%, Germany 7.1%, UK 6.7%, Switzerland 6.3%, Italy 4.6% (2002)

Debt - external

$68.9 billion (2003 est.)

Economic aid - recipient

$662 million from US (2003 est.)

Currency

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

Currency code

ILS

Exchange rates

new Israeli shekels per US dollar - 4.55 (2003), 4.74 (2002), 4.21 (2001), 4.08 (2000), 4.14 (1999)

Fiscal year

calendar year