ECONOMIC SURVEY
(COMMUNICATED BY GPO ECONOMICS DESK)
29 November 1994
PEACE ECONOMY:
* FOREIGN MINISTRY DELEGATION TO BRUSSELS FOR TALKS ON AID TO PALESTINIANS
AND REGIONAL DEVELOPMENT PROJECTS.
A Foreign Ministry delegation led by FM Shimon Peres and Director General
Uri Savir is in Brussels this week to participate in the Donor Countries
Conference for the Palestinian Autonomy, as well as the Steering Committee
for the next North Africa/Middle East Economic Conference to be held in
Amman in 1995. At the Donor Countries Conference, Israel will seek to
convince the donor states to send emergency economic aid to the
Palestinians, according to the Ministry's spokesman. Israel will also
participate in a joint Israel-Jordan-EU forum and a joint Israel-Jordan-US
forum both of which are intended to further regional development. These
forums will discuss the Jordan Rift Valley, Aqaba-Eilat, and water
projects for the area.
Foreign Ministry - Danny Shek, (02)-303343
* PERMANENT DISPLAY FACILITY FOR ISRAELI COMPANIES NOW OPEN IN CAIRO.
A permanent showroom for Israeli companies has been opened in Cairo by a
private company, El Shennawy International Exhibition, with the assistance
of the Israel Export Institute. The new showroom will be used by Israeli
exhibitors to display items, and to provide marketing and advertising
services in order to reach Egyptian businesses. The first exhibits include
medical equipment, jewelry, water purification products, and educational
games.
El Shennawy International - Devora Ganani, (02)-375736
MACRO NEWS:
* BANK OF ISRAEL RAISES INTEREST RATE BY 1.5% TO 17%.
The Bank of Israel announced it will be raising its interest rate by 1.5%,
today (Monday), 28.11.94 to reach 17%. The new rate will go into effect
1.12.94 (Thursday). In response, all banks will also raise their prime
lending rates by 1.5%. The Central Bank adopted the decision because, it
argued, though inflation is steady, the rate of inflation in 1995 will
still overtake the level forecast for 1995 (8-11%), and new public sector
wage agreements and other forces on the budget necessitate monetary curbs.
The Bank also argued that it is beginning to see signs of a decrease in
the amount of money in the economy, and is adding other monetary means to
the present monetary restraints.
Bank of Israel Ohad Bar-Efrat, (02)-552712
PRIVATIZATION:
* UNITED MIZRACHI BANK PRIVATIZED.
The Finance Ministry announced that on 25.11.94, MI Holdings, the
Government Owned Company responsible for selling the Government's shares
in the four major banks, had sold controlling interest in United Mizrachi
Bank to a group of investors led by the Ofer Brothers and Moshe (Muzi)
Wertheim. They paid $110 million for 26% of the Bank's shares. The sale
requires approval from the Knesset Finance Committee, the Supervisor of
Monopolies and Cartels from the Industry and Trade Ministry, and bank
regulators in Switzerland, the US, and England.
MI Holdings Gil Leidner, (03)-7520779
FOREIGN TRADE:
* JAPAN IS ISRAEL'S SECOND LARGEST EXPORT MARKET FOR FIRST NINE MONTHS OF
1994.
Exports to Japan rose by 18% to $681.5 million making the Far Eastern
nation Israel's second largest export destination after the United States.
During the first nine months of the year, total Israeli exports rose by
7.6%, according to the Israel-Japan Friendship Society and Chamber of
Commerce. Imports from Japan for the period came to $691.6 million, down
from $802.1 million during the corresponding period in 1993. The group
reported that the increase in exports was due to an increase in diamond
and industrial high tech exports.
Israel Japan Friendship Society, Elchanan Harel, (03)-6957122