ECONOMIC SURVEY
(COMMUNICATED BY GPO ECONOMICS DESK)
8 November 1995
GOVERNMENT SECTOR
* ISRAEL PLANNING TO TAKE MORE ACTIVE ATTEMPTS TO REDUCE BALANCE OF TRADE
DEFICIT WITH EUROPE.
Industry and Trade Minister Micha Harish has announced that Israel is
actively planning to deal with its $7.5 billion trade deficit with the EU.
Israel's trade deficit with the EU (excluding diamonds) is equal to 63% of
the total (for the first three quarters of 1995) compared to 72% during
the same period in 1994, the Central Bureau of Statistics reported. During
the Medpartenariat Conference held in Jerusalem at the end of October,
Harish said that Israel will either encourage importers to look outside of
Europe for importing products or conclude an agreement allowing Israeli
exporters greater access to the European markets. Harish said that Israeli
concerns in some sectors have a relative advantage over their European
counterparts, but due to EU regulations, they are not allowed to compete
freely on procurement. He is currently pushing to conclude negotiations on
this issue with the EU.
Industry and Trade Ministry - Ayal Fabian, 972-2-220389
Central Bureau of Statistics - David Neumann, 972-2-6553400
MACRO-ECONOMIC SECTOR:
* FAST ECONOMIC GROWTH CONTINUES DURING THIRD QUARTER, ACCORDING TO BANK
OF ISRAEL QUARTERLY SURVEY.
Economic growth continued at a fast pace as the economy expanded during
the third quarter, the Bank of Israel reported. 60% of commercial firms
and 30% of industrial firms reported increased activity, the Bank reported
in its quarterly general survey of Israel's economic trends. Only 15% of
commercial firms reported a slow down in their activities. Exports were
responsible for a large part of the growth. The Central Bank report is a
compilation of responses from 650 concerns in various aspects of the
economy.
Bank of Israel - Ohad Bar Efrat, 972-2-6552712
* ECONOMIC OUTPUT RISES BY 10% DURING FIRST SEVEN MONTHS OF 1995.
Economic output rose by 10%, after being adjusted for inflation, during
the first seven months of 1995, excluding the diamond sector, the Central
Bureau of Statistics reported. Without adjusting for inflation or seasonal
factors, economic output rose by 23% compared to the same period in 1994.
Output in the financial services, and water and electricity sectors rose
by 14% in real terms, while the construction industry had a 21% rise in
output during the period.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* BALANCE OF TRADE DEFICIT AND PUBLIC SECTOR DEFICIT RISE DURING
APRIL-SEPTEMBER.
Economic activity during the period from April to September increased, and
was characterized by a large rise in the balance of trade deficit, a drop
in unemployment, stability in private consumption, and a higher than
planned growth in the public sector's local deficits, the Bank of Israel
reported. For much of the period, exports fueled the growth, though at the
period's end, a drop in industrial exports was recorded, according to the
Bank. A decrease in private building activity was also recorded at the
period's end, the Bank said.
Bank of Israel - Ohad Bar Efrat, 972-2-6552712
* INITIAL ECONOMIC INDICATORS SHOW GDP GROWTH OF 7% FOR 1995.
Early economic indicators, based on 1995's first six to nine months and
projections, show a rise in GDP of 7%, approximately equal to growth in
1994, the Central Bureau of Statistics reported. Exports of goods and
services will rise by 8%, slightly less than the 12% recorded in 1994,
while imports of goods and services will increase by 8% compared to a rise
of 13% in 1994. Exports will equal about 75% of the value of civilian
imports (in dollar terms); and the balance of trade deficit will reach
nearly $10 billion, as compared to $7.9 billion in 1994. The CBS reported
that part of this increase is due to an increase of 8% in the dollar price
of imports, compared to an increase of 4% in the dollar price of exports.
Central Bureau of Statistics - David Neumann, 972-2-6553400
* FOREIGN CURRENCY RESERVES DECREASE BY $450 MILLION DURING OCTOBER.
Israel's foreign currency reserves decreased by $450 million, to $8.389
billion, in October, the Bank of Israel reported. The Bank reported that
the primary reason for the fall in the reserves was due to the
transferring of foreign currency by the Government and by commercial banks
from accounts in Israel to accounts situated abroad. These transfers were
partially offset by currency movement undertaken by the non-financial part
of the private sector.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712
* LARGE GROWTH IN DEVELOPMENT TOWNS, PRIMARILY IN SOUTH, AND DROP IN
KIBBUTZ POPULATION DURING FIRST HALF OF 1995.
Israel's 12 largest cities, all with over 100,000 inhabitants, equalled
just less than 45% of Israel's total population, the Central Bureau of
Statistics reported. The city with the greatest population growth during
the first half of the year was Ashdod, whose population increased by 2.9%
to 124,000 citizens. The other cities with the highest population growth
rates during the first six months of 1995 were Beersheva, with an increase
of 1.6%, and Rishon Lezion, with a 1.2% increase. During the same period,
kibbutz population continued its decrease, falling by approximately 600,
to of a total population of approximately 124,000.
Central Bureau of Statistics - David Neumann, 972-2-6553400